Longevity annuities can be purchased through qualified plans and IRAs

Annuity_2Qualified retirement plans and IRAs are subject to the Required Minimum Distribution (RMD) rules of IRC Sec. 401(a)(9). In February 2012, the IRS issued proposed regulations removing RMD impediments to longevity annuities. Final regulations (TD 9673) have been issued, modifying and clarifying the proposed regulations that permit participants and owners to use account balances to purchase deferred annuities beginning no later than age 85.

Before annuitization, the value of the “qualifying longevity annuity contract” is excluded from the account balance used to determine RMDs. Premiums paid for the contract may not exceed $125,000 or 25% of the employee’s account balance on the date of payment. Similar rules apply to 403(b) and 457(b) plans. The final regulations apply to contracts purchased after 7/1/14.


2 thoughts on “Longevity annuities can be purchased through qualified plans and IRAs”

  1. I have shared this on Twitter. Good Article.

  2. Steve Wisinski CPA CFE MAFF says:

    Thanks for the tweet, Jeff. Please contact us if you need any further information.

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