Do Annuities Have RMDs? Required Minimum Distribution Rules

Do annuities have required minimum distributions? It depends entirely on where the annuity lives. An annuity inside a retirement account follows that account's RMD rules. An annuity bought with after-tax money outside any retirement account has no RMDs at all during your lifetime. Everything else about annuity RMDs flows from that one distinction.

The One-Question Test: Qualified or Non-Qualified?

A qualified annuity sits inside a traditional IRA, 401(k), 403(b), or similar plan. The IRS has never taxed that money, so it forces distributions on a schedule — and the annuity, as an asset of the account, is swept into that schedule.

A non-qualified annuity was bought with dollars that already paid income tax. The IRS has no lifetime distribution claim on it, so there are no RMDs while you're alive — one of the main reasons savers use non-qualified contracts for money they may never need to spend. The full contrast between the two wrappers is in our qualified vs non-qualified annuity comparison.

The rest of this guide covers the qualified side — the annuities that do have RMDs.

When RMDs Start

Under the SECURE 2.0 Act, RMDs currently begin at age 73, and the starting age is scheduled to rise to 75 in 2033. Your first RMD gets a one-time grace period: you can delay it until April 1 of the year after you reach RMD age. The catch is that delaying stacks two distributions into one tax year — the postponed first RMD plus the current year's — which can inflate that year's taxable income.

If you're still working past RMD age, an employer plan at your current job may allow you to defer RMDs from that plan until you retire. IRAs get no such exception — IRA annuities start RMDs on schedule regardless of work status.

How the RMD Is Calculated for an Annuity

For a deferred annuity that hasn't been converted to income payments, the RMD math is the same as for any IRA asset: the contract's fair market value on December 31 of the prior year, divided by your IRS life-expectancy factor. Two annuity-specific wrinkles:

• The carrier reports the value. For contracts with enhanced death benefits or income riders, the IRS requires the reported value to include the actuarial value of those extra benefits, so the RMD base can be higher than the plain account value.
• The cash has to come from somewhere. If the annuity is the whole IRA, the RMD comes out of the annuity itself — mid-term if necessary. Many qualified contracts waive surrender charges for RMD withdrawals, but that's a contract provision to verify before buying, never an assumption. See how annuity surrender charges work for why this matters.

IRA aggregation softens the liquidity problem: RMDs across all your traditional IRAs can be totaled and taken from any one of them, so a brokerage IRA can supply the cash while the annuity IRA compounds untouched. Employer plans generally don't aggregate — each plan's RMD comes from that plan.

Annuitized Contracts: Payments Generally Satisfy the RMD

Once a qualified annuity is annuitized — converted into lifetime or period-certain income payments — those payments are generally treated as satisfying the RMD for the annuitized money. You don't calculate a separate RMD on a contract that no longer has an account value; the payment stream is the distribution.

SECURE 2.0 improved this further. Under the old rules, an annuitized contract was siloed: its payments couldn't count toward the RMD on the rest of the IRA, even when they exceeded what the annuitized money would have owed. The law now permits aggregating annuity payments with the remaining IRA balance for RMD purposes, which can shrink what you must pull from the non-annuity side. Our article on how SECURE 2.0 lets annuity income help satisfy RMDs walks through that change in depth.

The QLAC Exception: Deferring RMDs to as Late as 85

A qualified longevity annuity contract is the one sanctioned way to push RMDs back. Premium you move into a QLAC — up to an inflation-indexed IRS dollar limit — is excluded from your RMD calculation until the QLAC's income payments begin, which you can schedule as late as age 85. It's longevity insurance with a built-in RMD deferral: smaller forced withdrawals in your 70s, guaranteed income later.

Roth Accounts and Inherited Annuities

Two adjacent rulebooks are easy to confuse with the standard case:

• Roth accounts. A Roth IRA has no lifetime RMDs for the original owner, so an annuity inside one faces no forced withdrawals — and since 2024, designated Roth accounts in employer plans are free of lifetime RMDs too. How an annuity stacks up against Roth dollars generally is covered in our Roth IRA vs annuity comparison.
• Inherited annuities. Beneficiaries follow a different distribution clock entirely — spousal continuation, the 10-year rule for many non-spouse heirs of qualified contracts, and the 5-year or stretch options on non-qualified contracts. See inherited annuity tax rules for that rulebook.

Next Step: Buy Around the RMD Schedule, Not Against It

If you're putting IRA money into an annuity, the RMD schedule should shape the purchase: confirm an RMD-friendly withdrawal provision, keep enough liquidity outside the contract to cover forced distributions, and match the term to your age. Then shop the guarantee itself — compare live MYGA rates by term and carrier, scan today's best annuity rates, and check recent carrier rate changes before committing qualified dollars.