Yes, but only sometimes. Annuities held inside a traditional IRA or 401(k) are subject to required minimum distributions starting at age 73. Annuities bought with after-tax money, outside a retirement account, carry no lifetime RMD obligation at all. The two big exceptions worth knowing upfront: annuitized income payments usually satisfy your RMD automatically, and a Qualified Longevity Annuity Contract can push part of your balance out of the RMD calculation until age 85.
TL;DR:
- Annuities inside a traditional IRA or 401(k) are subject to RMDs starting at age 73, but those bought with after-tax money outside retirement accounts are not.
- Annuitized income payments generally satisfy RMD requirements, and QLACs allow deferral of RMDs on a portion of your savings until age 85.
- The calculation for RMDs relies on account value and IRS life expectancy tables, with delays potentially causing higher tax brackets or Medicare penalties.
- A Roth IRA annuity owner faces no RMD obligation, but inherited Roth annuities follow separate rules, and non-qualified annuities never require RMDs.
- Common mistakes include forgetting to include annuity value in total RMDs, assuming scheduled payments cover RMDs, and delaying the first RMD into the next year.
Table of Contents
- RMDs and Annuities: Key Facts at a Glance
- Do Annuities Themselves Trigger RMDs?
- How Are RMDs Calculated for Annuities?
- Annuitized Payments, Income Riders, and RMD Math
- QLACs and SECURE 2.0: What Changed for Annuity Owners
- Common RMD Mistakes With Annuities (and How to Avoid Them)
- A Note From Paul Barrett on RMDs and Annuities
- How Paulbinsurance Helps You Coordinate Annuities and RMDs
- Where to Verify These RMD Rules Yourself
- Sources
RMDs and Annuities: Key Facts at a Glance
Before getting into the mechanics, here’s what actually matters for your calendar and your wallet this year.
- Start age: RMDs begin at 73 for anyone born between 1951 and 1959. If you were born in 1960 or later, that age jumps to 75 starting in 2033.
- First-year deadline: You have until April 1 of the year after you turn 73 to take your first RMD, but every RMD after that is due by December 31.
- Penalty: Miss an RMD and the IRS charges a 25% excise tax on the amount you should have withdrawn. Fix it within the correction window and that penalty drops to 10%.
- QLAC cap: A Qualified Longevity Annuity Contract lets you exclude a capped premium amount from your RMD math entirely, but the cap is indexed and changes periodically — check with your carrier or advisor for the current figure before assuming an old number still applies.
Pro Tip: Mark April 1 on your calendar the year you turn 74, not 73. That’s the real hard deadline for your very first RMD if you delayed it, and missing it by even a few days triggers the excise tax.
Do Annuities Themselves Trigger RMDs?
The RMD rule doesn’t care that a product is called an “annuity.” It cares where the money sits. That distinction trips up more retirees than almost anything else in this topic.
A qualified annuity is one purchased inside a tax-deferred retirement account, such as a traditional IRA or an employer-sponsored 401(k) or 403(b). Because the same account-level rules that govern IRAs and workplace plans apply to any annuity held inside them, a qualified annuity is subject to RMDs once you hit the applicable start age. The insurance wrapper doesn’t exempt it.
A non-qualified annuity works differently. You buy it with money that’s already been taxed, outside any retirement account structure. There’s no lifetime RMD requirement here. When you do take withdrawals, the taxable portion is figured under LIFO rules (earnings come out first and get taxed) or, for annuitized payments, under an exclusion ratio that spreads your original investment back to you tax-free over the payment stream.
Roth IRA annuities sit in a category of their own. The original account owner never faces a lifetime RMD, since Roth IRAs are exempt from that rule while the owner is alive. Roth 401(k)s now follow the same exemption after SECURE 2.0. Inherited Roth annuities are a different story: beneficiaries generally face their own distribution timelines, and those rules deserve separate research before you assume Roth status protects an heir from ever touching the money.
Here’s the quick reference:
- Qualified annuity: subject to RMDs at your start age, no exceptions beyond annuitization or a QLAC.
- Non-qualified annuity: no lifetime RMD, taxed on withdrawal under LIFO or exclusion ratio.
- Roth annuity (owner): no lifetime RMD; inherited Roth annuities follow separate beneficiary rules.
If you’re not sure which bucket your contract falls into, check the paperwork from when you bought it. It’s usually stated on the first page, or your carrier can confirm it in a five-minute phone call.
How Are RMDs Calculated for Annuities?
For an annuity still in the accumulation phase (meaning you haven’t started taking income payments yet), the math is the same as for any IRA. Take your account’s value as of December 31 of the prior year, divide it by the life expectancy factor from the IRS Uniform Lifetime Table in Publication 590-B, and that’s your RMD for the year.
For example, if your qualified annuity has a given value on December 31 and you use the IRS life expectancy factor for your age, dividing the account value by that factor determines your RMD for the year. That’s the minimum you must withdraw before the deadline, whether you pull it from the annuity itself or from another qualified account, as long as the total across all your IRAs meets the requirement.
Timing matters more than most retirees realize:
- Delaying your first RMD to April 1 of the following year feels like a break, but it forces two RMDs into the same calendar tax year. That can push you into a higher bracket or trigger a Medicare IRMAA surcharge you’d have otherwise avoided.
- Annuitized contracts work differently. Once you convert the contract into a stream of periodic payments, those payments generally count toward satisfying the RMD, provided they meet IRS distribution requirements for annuitized income.
- If the annuitized payment falls short of the calculated RMD for that year, you’re on the hook to make up the difference from another source, whether that’s the same contract or a separate IRA.
The IRS Uniform RMD worksheet walks through the calculation step by step and is worth printing out the first year you go through this, if only to confirm your custodian’s math matches yours.
Annuitized Payments, Income Riders, and RMD Math
Here’s where a lot of confusion creeps in. If your annuity has a guaranteed lifetime withdrawal benefit or an income rider, you’re often looking at two different numbers: the account value and the benefit base. Only one of them matters for RMD purposes.
The IRS calculates your RMD using account value, full stop. The benefit base, which insurance companies use to calculate your guaranteed income rider payments, has no bearing on the RMD figure. Advisors point out that these two numbers being administratively separate is one of the more common sources of confusion, since a benefit base can be considerably higher than actual account value on a contract that’s been running for years.
That separation creates real friction. If your GLWB payment for the year happens to be lower than what the account-value-based RMD calculation demands, you’ll need a supplemental withdrawal to close the gap. If the payment already exceeds the RMD, you’re covered without extra action.
A few things worth checking with your carrier directly:
- Ask whether the contract has RMD-friendly provisions, since many carriers waive surrender charges specifically when a withdrawal is needed to satisfy an RMD.
- Confirm they’ll send you a year-end account valuation automatically, rather than waiting until you call and ask.
- Find out whether their RMD process includes an automatic top-up feature so you’re not scrambling in December.
Pro Tip: Call your carrier in October, not December. Ask them directly: “Will my scheduled payment this year cover my full RMD, or do I need a supplemental withdrawal?” Getting that answer two months early beats finding out on December 28.
QLACs and SECURE 2.0: What Changed for Annuity Owners
A Qualified Longevity Annuity Contract does something no other RMD strategy does: it lets you carve out a chunk of your retirement savings and legally exclude it from the RMD calculation entirely, sometimes for over a decade.
Here’s how it works. You use a portion of your qualified account to buy a QLAC, and that premium amount gets excluded from your RMD-triggering balance until the contract starts paying out, which can be deferred as late as age 85. Your RMDs on the rest of your account shrink accordingly, since the calculation only applies to what’s left.
SECURE 2.0 reshaped this landscape in a few concrete ways:
- Raised and indexed the QLAC cap, giving retirees more room to shelter savings from RMD calculations than under the old fixed-dollar limit.
- Expanded flexibility for annuity features inside retirement plans, making it easier for plan sponsors to offer annuity options without running into old regulatory friction.
- Allowed qualified annuity payments in some cases to help satisfy RMD obligations on other qualifying accounts, a meaningful change from the old requirement that each account’s RMD stand entirely on its own.
Where does this leave your planning? A QLAC makes the most sense if you’re worried about outliving other assets and want guaranteed income starting later in life, without the RMD pressure building on that money in the meantime. It’s not automatically better than a Roth conversion or a qualified charitable distribution. Each solves a different problem: a QLAC defers and reduces RMDs on a slice of savings, a Roth conversion eliminates future RMDs on converted funds at the cost of taxes now, and a QCD sends the money to charity while counting toward your RMD without hitting your taxable income at all.
Common RMD Mistakes With Annuities (and How to Avoid Them)
Most annuity RMD penalties trace back to a small handful of avoidable errors, not genuine confusion about the law.
The three that show up most often: retirees forget to include an annuity’s value when totaling up their RMD across multiple accounts, they assume their annuitized payment automatically covers the full RMD without checking the actual number, and they push their very first RMD into April of the following year without realizing it stacks two distributions into one tax return.
Three moves worth making before year-end, every single year:
- Confirm your December 31 account value directly with the carrier. Don’t rely on last year’s statement or a rough estimate.
- Check your annuity payment schedule against surrender-charge waivers. If you need a withdrawal beyond your scheduled payment, ask whether the carrier waives the surrender charge for RMD-related withdrawals.
- Consider aggregating RMDs across multiple IRAs. You can total the RMD requirement across several IRAs and satisfy it from just one, which sometimes simplifies which account you tap.
Pro Tip: Gather your year-end statements and the contract pages showing withdrawal and surrender rules before you call anyone. A tax advisor or your annuity issuer can answer your question in one phone call if you already have the numbers in front of you, instead of two calls spent tracking down paperwork.
When your situation involves multiple accounts, an annuitized contract, or a QLAC interacting with other RMDs, that’s the point to loop in a tax advisor or your annuity issuer directly rather than guessing at how the pieces fit together.
A Note From Paul Barrett on RMDs and Annuities
Since 2007, most of the retirees I’ve worked with weren’t confused about whether they owed an RMD. They were confused about which account the annuity actually lived in, and whether their scheduled payment covered what the IRS required. That gap causes more accidental penalties than anything else.
I’ve seen small fixes prevent real problems: automating an RMD withdrawal so it never gets forgotten, or simply asking a carrier for a surrender-charge waiver instead of assuming one doesn’t exist. Before year-end, pull your contract language and confirm the numbers with your issuer. Coordinate the timing with a tax advisor, especially if Medicare IRMAA brackets are anywhere near your income.
— Paul
How Paulbinsurance Helps You Coordinate Annuities and RMDs
Getting the RMD math right on an annuity often means untangling contract language most retirees never had a reason to read closely, on top of figuring out how that withdrawal affects Medicare premiums the same year. Paulbinsurance approaches this as one connected picture rather than two separate problems, since a mistimed RMD can quietly push you into a higher IRMAA bracket the following year.

A typical review starts with your annuity contract pages and your most recent year-end statement, the same documents mentioned earlier. From there, we check whether your contract has RMD-friendly provisions, confirm your account value with the carrier if needed, and walk through how the withdrawal timing interacts with your Medicare costs. If you’re also weighing fixed annuity options or want to see how annuity income affects Medicare IRMAA surcharges, that’s part of the same conversation. Schedule a no-obligation Medicare Advantage plan review with our team and bring your annuity statements. We’ll help you sort out what actually needs attention this year.
Where to Verify These RMD Rules Yourself
For the legal specifics behind everything above, go straight to the source. The IRS retirement plan and IRA RMD FAQ page covers start ages, qualified account rules, and QLAC treatment. IRS Publication 590-B contains the Uniform Lifetime Table and calculation worksheets. If you’ve already missed an RMD, the IRS correction guidance explains the reduced penalty process and Form 5329 filing steps. None of these replace a conversation with a tax professional about your specific accounts, but they’re the right starting point for the actual rules.
This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.
Sources
- Retirement plan and IRA required minimum distributions (RMDs) – IRS
- Correcting required minimum distribution failures – IRS





