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Can annuity income be used to offset RMD obligations from other accounts?

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AUTHOR: Christopher Matthews on 7/05/2024

On Fidelity.com, under “viewpoints.retirement,” one currently finds a post titled “Create Income That Can Last a Lifetime” (https://www.fidelity.com/viewpoints/retirement/income-that-can-last-lifetime). At the end of that post, there is a note on “RMDs and annuities,” which states, in part, the following:

The SECURE Act 2.0 that went into effect in January 2023 allows IRA income annuity owners the choice to aggregate their income annuity with their other IRAs for the purposes of determining their required minimum distributions. If you are 73 and older, cash flow generated from the income annuity can be used to potentially offset RMD obligations from other accounts, allowing assets within these other accounts to remain invested and grow tax-deferred.

I have a deferred annuity kicking in this December, and my first RMD year will be 2025. I am curious to know whether any HD writers/readers currently subject to RMDs and receiving annuity income can confirm that this “strategy” is, in fact, possible. Of course, I would also be delighted if any other HD writers/readers can shed useful light on the topic. Fidelity couches their statement in terms of “potentiality” and the ubiquitous advice to consult a tax specialist (an individual I do not employ).

This is my first HD post/comment, though I have followed the site almost from the beginning, and Jonathan since the WSJ days. I owe him much credit for educating me into my successful investment strategy over these many decades, and I can only add my wishes to those of the hundreds of others that his current dire circumstances will turn out better than any of us could be expected to hope.

Chris M.

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