RMDs and Annuities in 2026: A Guide for Annuity Producers
Updated October 2026
Short answer: Here is how RMDs and annuities interact in 2026. Required minimum distributions (RMDs) start at age 73 for clients born 1951–1959 and age 75 for those born 1960 or later. A deferred annuity inside an IRA counts toward the RMD like other IRA assets, annuitized payments generally satisfy the RMD for that contract, and a QLAC (2026 premium limit: $210,000) is excluded from RMD calculations until payments begin.
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RMD rules in 2026: ages, deadlines and the excise tax
A required minimum distribution is the minimum amount the IRS requires an owner to withdraw each year from tax-deferred retirement accounts once they reach their applicable age. RMD rules apply to traditional, SEP and SIMPLE IRAs and to employer plans such as 401(k), 403(b) and 457(b) plans. Roth IRAs and designated Roth accounts have no RMDs during the owner's lifetime.
| Client born | RMD starting age (SECURE 2.0) |
|---|---|
| 1950 or earlier | Already past the start date under earlier rules (70½ or 72) |
| 1951–1959 | 73 |
| 1960 or later | 75 |
The statute's wording overlapped for 1959 births; Treasury's 2024 proposed regulations apply age 73 to that year.
- First RMD: can be delayed until April 1 of the year after the client reaches RMD age. Delaying means two taxable RMDs in the same calendar year.
- Later RMDs: due by December 31 each year.
- Missed RMDs: the shortfall is subject to a 25% excise tax, reduced to 10% if corrected in a timely manner (the IRS describes a two-year correction window).
- No rollovers or conversions: RMD amounts can't be rolled over to another tax-deferred account or converted to a Roth IRA.
This is general education for licensed professionals, not tax or legal advice. Clients should confirm their situation with a tax professional.
How RMDs and annuities interact
Deferred annuities held in an IRA
Before annuitization, an IRA annuity is treated much like an account: the RMD is based on the prior December 31 value divided by the applicable IRS life expectancy factor. Under the Treasury regulations, the value used can include the actuarial present value of certain additional benefits, though many common features are disregarded. The carrier calculates and reports that value, so ask for it rather than estimating from the account value.
Surrender charges are a contract question, not a tax one. Some contracts waive charges on RMDs calculated for that contract; others count RMDs against the free-withdrawal amount. If the contract carries an income rider, confirm how the rider treats RMD withdrawals before the client takes one, because excess withdrawals can reduce guaranteed income on some riders.
RMD aggregation basics for IRAs
Aggregation means satisfying several accounts' RMDs from fewer accounts. The rules differ by account type:
- IRAs: calculate the RMD separately for each IRA, then withdraw the total from any one or more IRAs.
- 403(b) contracts: the same approach works across 403(b)s.
- 401(k) and 457(b) plans: RMDs must be taken separately from each plan.
- Inherited IRAs: aggregate only with other IRAs inherited from the same decedent.
This is where planning pays. A client can take the household's full IRA RMD from a liquid IRA and leave the annuity untouched during its surrender period, or draw from the annuity's free-withdrawal amount and let other assets keep working. Run both versions before the year-end rush.
Annuitized contracts and partial annuitization
Once an IRA annuity is annuitized, payments that meet the regulations' requirements satisfy the RMD for that contract. When a client uses part of an IRA to buy an annuity, Publication 590-B describes an election to combine the annuity's value with the remaining account balance and reduce the RMD by the annuity payments received. Income from an immediate annuity (SPIA) can therefore lower what has to come out of the rest of the IRA. Confirm the election and calculation with the custodian and the client's tax professional.
QLACs: deferring RMDs on part of the IRA
A qualifying longevity annuity contract (QLAC) is a deferred income annuity bought inside a qualified plan or IRA that meets IRS requirements. Key 2026 rules:
- The 2026 premium limit is $210,000 under IRS Notice 2025-67, generally applied across all of a client's plans and IRAs combined.
- The former 25%-of-balance premium limit has been repealed.
- Payments must begin no later than the first day of the month after the client's 85th birthday.
- Before annuitization, the QLAC's value is excluded from the account balance used to figure RMDs.
For a client who doesn't need all of their RMD income in their 70s, a QLAC can shrink near-term RMDs while building guaranteed late-life income. See deferred income annuities for carrier options.
Nonqualified annuities
RMD rules apply to IRAs and employer plans, so nonqualified annuities aren't subject to lifetime RMDs. They have their own after-death distribution requirements, which depend on the contract and beneficiary.
Beneficiary rules in brief
Under the 10-year rule, most designated beneficiaries who aren't eligible designated beneficiaries must empty an inherited account by the end of the tenth year after the owner's death. Eligible designated beneficiaries include a surviving spouse or minor child, a disabled or chronically ill individual, and someone not more than 10 years younger than the owner. Spouses who are sole beneficiaries have the most options, including rolling the account into their own IRA. Beneficiary designations on IRA annuities deserve the same review as the rest of the plan.
RMD talking points for annuity producers
- "Your RMD is calculated for each IRA, but you can take the total from whichever IRA makes the most sense."
- "If we annuitize part of your IRA, the income can count toward what you'd otherwise have to withdraw from the rest."
- "A QLAC lets you set aside a portion, $210,000 for 2026, that doesn't count in your RMD calculation until income starts, no later than 85."
- "Missing an RMD now carries a 25% excise tax, or 10% if it's fixed promptly, so let's put the date on the calendar."
- "If you're thinking about Roth conversions, this year's RMD has to come out first."
- "Your CPA should confirm the numbers; my job is to make sure the annuity side works with them."
BetterAnnuityComp.com's sales tools include RMD and RMD & Stretch IRA calculators plus SPIA comparison and quoting software, so you can show the numbers instead of describing them. More planning resources are on the annuity resources page.
Frequently asked questions
Can BetterAnnuityComp.com beat my current annuity commission?
That is our sole job: no matter your current commission level, if you meet our minimum requirements (solo producers have none), you automatically get higher commission than where you are today. Starting comp is for every producer, including new producers with no experience, and there is no production minimum. If you have strong production to show, we contract you above our starting comp, and established agencies, financial advisors and financial firms, and healthcare agencies can earn above it too. Submit your application, schedule a Zoom and share your current commission levels by carrier. We compare them carrier by carrier and contract you above them, with full back office support, case management, carrier contracting and sales tools included.
Does an annuity inside an IRA have to take RMDs?
Yes. An IRA annuity is subject to the same RMD rules as other IRA assets. Before annuitization, the RMD is based on the contract's value as calculated by the carrier, and the total IRA RMD can be taken from any one or more of the client's IRAs.
Can a client take their total IRA RMD from just one IRA?
Yes. The RMD is calculated separately for each IRA, but the total can be withdrawn from any one or more IRAs. 401(k) and 457(b) RMDs, by contrast, must be taken separately from each plan.
What is the QLAC limit for 2026?
The 2026 QLAC premium limit is $210,000, per IRS Notice 2025-67. The former 25 percent of account balance limit was repealed, and QLAC payments must begin no later than the first day of the month after age 85.
Do annuitized IRA payments count toward the RMD?
Payments from an annuitized IRA contract that meet the Treasury regulations generally satisfy the RMD for that contract. If only part of an IRA was used to buy the annuity, an election described in IRS Publication 590-B can let annuity payments reduce the RMD from the remaining balance.
What is the penalty for missing an RMD?
The shortfall is subject to a 25 percent excise tax, reduced to 10 percent if it is corrected in a timely manner. The IRS describes a two-year correction window.
Sources
- IRS — Retirement Plan and IRA Required Minimum Distributions FAQs
- IRS — Publication 590-B, Distributions from Individual Retirement Arrangements
- IRS — Notice 2025-67, 2026 Amounts Relating to Retirement Plans and IRAs
- IRS — Instructions for Form 1098-Q, Qualifying Longevity Annuity Contract Information
- eCFR — 26 CFR 1.401(a)(9)-6, RMDs for Defined Benefit Plans and Annuity Contracts
- Federal Register — Required Minimum Distributions, Proposed Regulations (July 19, 2024)
- IRS — Retirement Topics: Beneficiary
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