First, thanks!
This bears "checking out"!
(Note: My next "Annuitization Opportunity" will be in mid next year (7/2022) and each year thereafter.)
If I am understanding correctly, I have multiple options:
1. Withdraw up to the RMD (taxed as Ordinary Income) amount prior to annuitization, then annuitize. It is then no longer an IRA, no future RMDs due for this.
2. Annuitize, and the amounts (monthly or quarterly) paid out until year end by the annuity, will count toward the RMD due for that year! Make up the total RMD difference from other IRAs.
By doing #2 (no withdrawals) instead of #1, the annuity "income base" will not be reduced at all, resulting in slightly higher annuity payments for life.
Also, it appears that since the annuity payments will be taxed as Ordinary Income, just as any RMDs are, it all evens out for the IRS(?). (For illustrative purposes, this assumes that no "non-deducted" IRA contributions were ever made into the IRA annuity.)
Of course, I'll check this all out with both my CPA and CFP. This posting was just to gather some initial planning info for the front end of the process.
Thanks much!
