A. First, we’re a little confused about whether you bought the annuity with funds inside or outside a qualified retirement plan. It can make a big difference for many retirees.
In general, you must begin distributions from a qualified plan or a traditional IRA in the year after the year in which you turn age 701/2. Thus, if you invested in an annuity or some other vehicle, you must take at least a minimum distribution (calculated under special IRS tables), whether you want to or not.
In comparison, if you invest in an annuity outside of a qualified retirement plan or IRA, you may not have to begin receiving distributions, depending on the annuity’s terms.
Based on your information, it appears that you bought the annuity inside a qualified retirement plan. Normally, you’d be required to take minimum distributions. But you don’t have to begin receiving distributions from a qualified plan if you haven’t retired at age 701/2 (and you don’t own 5 percent or more of the company).
- Small Business Tax Deduction Strategies No matches