Pension Corporation of America
Wealth Management
Pension Corporation of America
2133 Luray Avenue
Cincinnati, OH 45206
513-281-3366
fax 513-281-1799
wealthmanagement@pencorp.com
www.pencorp.com
 
 




Required Minimum Distributions (RMDs)

Generally, annuity contracts have fees and expenses, limitations, exclusions, holding periods, termination provisions, and terms for keeping the annuity in force. It is important to understand that purchasing an annuity in an IRA or an employer-sponsored retirement plan provides no additional tax benefits than those available through the tax-deferred retirement plan.

Annuity guarantees are subject to the claims-paying ability and financial strength of the annuity issuer.

 

Can You Satisfy the RMD Rules with the Purchase of an Annuity Contract?

Your purchase of an annuity contract with the funds in your IRA or retirement plan satisfies the RMD rules if all of the following are true:

  • Payments are made at least yearly
  • The annuity is purchased on or before the date that distributions are required to begin
  • The annuity is calculated and paid over a time period that does not exceed those permitted under the RMD rules
  • Payments, with certain exceptions, do not increase

If you participate in a 401(k) (or similar plan) or an IRA, you may also be able to use up to 25% of your account balances (up to a maximum of $145,000 from all accounts, indexed for inflation) to purchase a qualifying longevity annuity (or QLAC). The value of the QLAC is disregarded when you calculate the amount of RMDs you are otherwise required to take from your account each year. Payments from the QLAC can be delayed up to age 85, and are treated as satisfying the RMD rules when paid. The rules can be complicated, and QLACs are not right for everyone, so be sure to consult a qualified professional for further information.



Advisory Services Offered Through PCA Investment Advisory Services, Inc.
Securities Offered Through L.M Kohn & Company 10151 Carver Road, Ste. 100., Cincinnati, OH 45242
Member FINRA/SIPC And a Registered Broker-Dealer not affiliated with PCA Investment Advisory Services, Inc. This communication is strictly intended for individuals residing in the state(s) of CT, IN, KY and OH. No offers may be made or accepted from any resident outside the specific states referenced.
Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2022.