A Required Minimum Distribution (RMD) is the minimum amount the IRS requires you to withdraw annually from tax-deferred retirement accounts starting at age 73. Failure to withdraw the full RMD amount can result in a 25% penalty tax on the amount not taken (reduced to 10% if corrected in a timely manner).
Your financial institution that handles the annuity should have made you aware if you have an RMD for the year. Verify whether or not you have an RMD for this account and answer the question accordingly.
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