Can I take my required minimum distribution due on my transfer payout
 annuity from the roll-over IRA account.

[kaimartian]

I am rolling over my annuity at TIAA to my IRA account with Schwab. I should
start taking my required minimum distribution this year. I am wondering
whether I can take it on the Schwab side?


The problem is that TIAA does not have provision for me to directly withdraw
fund to satisfy the required minimum distribution. If I want to do the
required minimum distribution with TIAA, I would need to change the current
transfer payout contract to a new annuity contract.

[dmertz]

Is the TIAA annuity within an IRA account or is it in some other type of retirement account like a defined benefit plan or 401(k) (an employer-sponsored plan)?

[kaimartian]

A 401(a) employer-sponsored matching plan

[kaimartian]

I would like to thank both people who answered my question. Turns out, in my
particular situation which I did not realize, the question is moot. I have
another 401(a) account with Fidelity and I can do the withdrawal there.

[dmertz]

The question is *not* moot.  Each 401(a) account *must* satisfy it's own RMD by a distribution from that 401(a) account.  A distribution from one 401(a) account cannot be used to satisfy the RMD requirement of a different 401(a) account.

[SweetieJean]

dmertz is absoutely correct. In addition, a 401(a) is diofferent form an IRA, and an RMD from one cannot be used to satisy the other.

[dmertz · Accepted solution]

The RMD for the TIAA 401(a) plan must be satisfied before the assets are rolled over to an IRA.  No part of the RMD required of the TIAA plan can be rolled over to the IRA.  If TIAA handles this properly, TIAA will not permit you to perform any rollover of the plan until you've received a distribution paid to you that satisfies your 2016 RMD.

If you have already received a distribution from the TIAA plan, you've already received your 2016 RMD from the plan.  Any portion of that distribution in excess of your 2016 RMD could have been rolled over to an IRA within 60 days of receiving the distribution.  Any other amounts they distribution from the plan in 2016 after you have satisfied your 2016 RMD can be rolled over as well.   If you have not yet received a distribution from the plan for 2016, you can wait to receive the 2016 distribution, roll over the amount in excess of your 2016 RMD, then roll over the remainder of the account before the end of 2016.

If you end up rolling the entire plan  over to an IRA before receiving the RMD from the plan, you've effectively made an excess contribution to the IRA of the amount of plan RMD rolled to the IRA.  You would then need to request a return of contribution from the IRA of the RMD amount.  This situation should be avoided if at all possible since the IRA custodian is often less than cooperative in completing the necessary return of contribution.  If a return of contribution is not performed, you'll have excess contribution penalties to pay each year until the excess contribution is properly removed from the IRA.

[dmertz]

If the concern is that the TIAA Transfer Payout Annuity was set up to directly roll each annual distribution from the 401(a) plan to an IRA, you have a problem to resolve with TIAA since it is not permissible to roll to the IRA any portion of the distribution from the 401(a) plan that constitutes your RMD.  As I mentioned, if your RMD does get rolled to a traditional IRA, it is considered to be an excess regular contribution to your traditional IRA that must be dealt with accordingly with a "return of contribution" from the IRA, not a regular distribution from the IRA.

This situation shouldn't be all that unusual for TIAA.  They should be aware that the Internal Revenue Code prohibits them from directly rolling over any distribution from your 401(a) plan before a distribution of your RMD for this 401(a) plan is paid to you.  One thing to double-check is that the Transfer Payout Annuity is actually held by your 401(a) plan and was not, in fact, rolled over to an IRA when the annuity was established.  Had your entire 401(a) been rolled to an IRA, you would have received a From 1099-R for the rollover of your entire 401(a) balance.  There's also may be the possibility of rolling the entire annuity in-kind to an IRA.  If that can be done, the annual payout could then be moved to another IRA by nonreportable trustee-to-trustee transfer rather than by distribution and direct rollover, allowing the RMD to be taken from the destination IRA.

A final alternative might be to change the payout method to be a payment paid to you which you then roll indirectly, minus the amount of your RMD, to the IRA.  The unfortunate consequence of this method is that 20% federal tax withholding is required on the portion that is eligible for rollover (the portion in excess of your RMD), and in some states, mandatory state tax withholding as well.

[dmertz]

I've added to my previous comment.

[retiree]

The IRS does not care if you take the RMD from each 1099-R account or if you take it all from one of your 1099-R accounts.

TTax does not report any of the RMD information to the IRS.
You do not actually show an RMD amount on your return.

The Financial Institution or plan Administrator of your 1099-R accounts must report the year end Fair Market Value to the IRS, and should also report the FMV to you as well.

It is up to you to determine what your total RMD amount is for all of your 1099-R accounts.  Then you need to determine if any distribution(s) that you take (or would normally take) each year is equal to or greater than the total of your RMDs.

An RMD amount is not required to be taken from each/every account --as long as the total of all distributions from all account distributions taken, is equal to or greater than the RMD you don't have to take an RMD from any given account.  Just say no distribution was taken.

TTax only presents the RMD questions to ensure that you are aware of the requirement to withdraw the RMD.

[dmertz]

This answer applies only to the aggregation of RMDs of IRA accounts and (separately) the aggregation of 403(b) accounts.  This answer is incorrect for this case because the TIAA account is a 401(a) account, which *must* satisfy its own RMD with a distribution from the TIAA account.

[SweetieJean]

Correct!

[TomD8]

"The IRS does not care if you take the RMD from each 1099-R account or if you take it all from one of your 1099-R accounts."
Not exactly true.  You cannot take the RMD for one type of account from a different type of account. You cannot take an employer plan RMD from an IRA or vice versa.  For further details see this: https://www.irahelp.com/slottreport/multiple-retirement-accounts-and-rmds-can-i-take-required-distri...