How much (%) will be required of the 1st RMD after 70.5 for a 408b profit plan?

[mr-bill2]

I am planning my future distribution to my 408b profit sharing plan.  What will be the 1st years % distribution and or where can I find a distribution-chart.  The IRS is too confusing.

[dmertz · Accepted solution]

By 408b plan, I assume that you are referring to an IRA annuity established under section 408(b) of the tax code.  Generally, distributions from an IRA annuity must be calculated by the custodian of the IRA annuity.  However, if the annuity is a deferred annuity that has not yet been annuitized to generate a stream of payments, the RMD can be calculated from the previous year's year-end Fair Market Value reported by the custodian.  See the following IRS web page:

https://www.irs.gov/retirement-plans/plan-participant-employee/required-minimum-distribution-workshe...

If the IRA annuity has been annuitized to provide a stream of payments and therefore has no reported year-end value, the distributions themselves are all RMD and the entire RMD required of the IRA annuity.  The custodian has already structured the payout rate to meet the RMD requirements.