Are annuities subject to RMD? Sometimes. A qualified annuity held inside an IRA or 401(k) is subject to required minimum distributions once you reach your RMD age, while a non-qualified annuity bought with after-tax money carries no lifetime RMD at all.
Key Takeaways
Qualified annuities (funded with pre-tax dollars inside an IRA, 401(k), 403(b), or similar plan) are subject to RMDs, the same as any other balance in those accounts, per the IRS RMD rules.
Non-qualified annuities (bought with after-tax money outside a retirement account) have no lifetime RMD, because tax was already paid on the principal (Fidelity).
Under SECURE 2.0, the RMD age is 73 for people born 1951 to 1959 and 75 for people born 1960 or later (Congressional Research Service).
Once a qualified annuity is annuitized, the income payments generally satisfy the RMD for that contract, so no separate calculation is needed on the annuitized portion (Treasury final regulations, July 2024).
Under the longstanding default rule, an annuitized contract is treated separately, so its payments are not pooled with the RMDs from your other account-based IRAs.
A missed RMD triggers a 25% excise tax on the shortfall, reduced to 10% if corrected within two years (IRS).
Annuities sit in an awkward spot in retirement tax planning: some are tax-deferred retirement accounts in their own right, and some are simply after-tax contracts. That difference decides everything about whether required minimum distributions apply. Below is how the rules break down for 2026, why annuitized payments behave differently from account balances, and how larger RMDs quietly connect to the Roth conversion conversation.
Annuities and RMDs
YesQualified annuities in an IRA or 401kIRS
NoNon-qualified annuitiesIRS
73 to 75RMD ageIRS
25%Penalty on a missed RMDIRS
Figures for the 2026 tax year, verified against IRS primary sources.
Are annuities subject to RMD?
The answer turns on one distinction: is the annuity a qualified retirement account or a non-qualified after-tax contract. A qualified annuity is subject to RMDs. A non-qualified annuity is not, at least during the owner’s lifetime.
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A qualified annuity is held inside a tax-advantaged account such as a traditional IRA, SEP IRA, SIMPLE IRA, 401(k), 403(b), or 457(b). Because those dollars went in pre-tax and grew tax-deferred, the IRS eventually requires distributions so the deferred tax gets collected. The annuity does not get special treatment; it follows the same RMD schedule as the rest of that account type.
A non-qualified annuity is purchased with money you have already paid income tax on. There is no lifetime RMD on it, so the owner controls the timing of withdrawals. Roth IRAs share this feature: like a non-qualified annuity, a Roth IRA is not subject to RMDs during the original owner’s lifetime. For a fuller breakdown of the two structures, see qualified vs non-qualified annuities and the broader primer on what an annuity is.
Which annuities are subject to RMD? (type by type)
The table below maps common annuity situations to their RMD treatment. Note that this is about whether an RMD applies, which is a separate question from how annuity income is taxed once it is paid.
Annuity type versus RMD treatment (2026)
Annuity situation
Subject to RMD?
How it works
Qualified deferred annuity inside a traditional IRA or 401(k), not yet annuitized
Yes
Its year-end value is included in the account balance used to calculate the RMD.
Qualified annuity that has been annuitized (irrevocable income stream)
Yes, but self-satisfying
The scheduled payments generally satisfy the RMD for that contract; no separate figure is calculated.
Non-qualified deferred annuity (after-tax money)
No
No lifetime RMD; the owner chooses when to take income.
Non-qualified immediate income annuity
No
Payments are contractual, not RMD-driven; taxed under the exclusion ratio.
Roth IRA holding an annuity
No
No RMD during the original owner’s lifetime.
QLAC inside an IRA (deferred income annuity)
Excluded until payments begin
QLAC value is removed from the RMD balance until income starts, no later than age 85.
What is your RMD age in 2026?
Your RMD age depends on your birth year. SECURE 2.0 set the age at 73 for anyone born between 1951 and 1959, and 75 for anyone born in 1960 or later, according to the Congressional Research Service. Your first required distribution can be delayed until April 1 of the year after you reach that age, per the IRS.
Missing an RMD is expensive. The IRS applies a 25% excise tax on any amount you failed to withdraw, and that drops to 10% if you correct the shortfall within two years. Once income is flowing, the practical question becomes how to pay the taxes on your RMD.
How do annuitized payments satisfy your RMD?
When you annuitize a qualified annuity, you convert the account value into an irrevocable stream of income payments. From that point, the payments themselves generally satisfy the RMD for that contract, so there is no separate account balance to divide by a life-expectancy factor. The Treasury final regulations issued in July 2024 confirm this treatment for annuitized contracts.
This is why a deferred annuity and an income annuity behave differently. A deferred annuity that has not been annuitized still reports a year-end value, and that value feeds the standard RMD math for the account. An annuitized contract no longer has a spendable balance in the same sense, so the payment schedule does the work instead. Fidelity notes that qualified annuity income can help meet an RMD obligation for that contract.
One practical caution: the payments must actually meet the RMD standard for that contract. Certain features, such as large increasing payments or long guarantee periods, have their own rules, so a retiree in this position often has a financial professional confirm the contract qualifies before assuming it is fully covered.
Can annuity RMDs be aggregated with your other IRA RMDs?
Generally, no, not once the contract is annuitized. Under the longstanding default rule, an annuitized annuity is treated as a separate arrangement: its payments satisfy that contract’s requirement, but they are not pooled with the RMDs you calculate from your other account-based IRAs. In other words, the annuity payments cannot be used to cover the RMD on a separate IRA, and a withdrawal from that separate IRA cannot cover the annuity.
This matters because account-based IRAs do enjoy aggregation. If you hold several traditional IRAs that are not annuitized, you can total their RMDs and take the combined amount from any one of them, as explained in the RMD aggregation rules. Annuitized contracts historically stand outside that pool.
The picture is evolving. SECURE 2.0 created an option to treat annuity and non-annuity amounts together, and the IRS proposed regulations supply the valuation method (fair market value as of December 31 of the prior year), proposed to apply beginning with 2026 distributions. Because that piece remains proposed rather than final, many retirees treat the separate-contract rule as the operative default and confirm current guidance with a professional before relying on aggregation.
Can an annuity reduce your RMDs?
Yes, in one specific case: a qualifying longevity annuity contract, or QLAC. When you use IRA money to buy a QLAC, that premium is carved out of the account balance the IRS uses to figure your RMD, so it lowers the required distribution until the QLAC income begins, which must start no later than age 85.
SECURE 2.0 simplified the cap to a flat, inflation-indexed premium limit, reported at $210,000 for 2026. A QLAC must be a fixed income annuity; variable and indexed products do not qualify. See what a QLAC is for the full mechanics.
How do annuity RMDs connect to Roth conversions?
RMDs are not optional income, and they stack on top of Social Security, pensions, and any annuity payments you already receive. For a retiree with a large qualified annuity, those forced distributions can push taxable income into a higher bracket, which is the classic driver behind Roth conversion planning. Those forced distributions can also raise the taxable share of Social Security in the same year.
In 2026, the 24% federal bracket tops out at $201,775 for single filers and $403,550 for married couples filing jointly. Retirees in a lower-bracket window before RMDs begin sometimes consider converting pre-tax IRA dollars to Roth, which shrinks the future balance that RMDs are calculated on. A qualified annuity is a Roth alternative some savers weigh, and the annuity vs Roth IRA comparison covers that trade-off in detail.
None of this is one-size-fits-all. Whether a conversion helps depends on your bracket now versus later, your other income, and your Medicare premiums, so a financial professional can model whether shifting money before RMD age fits your situation.
Where Q3 Advisors fits in
Q3 Advisors is a fee-only RIA focused on Roth conversion and retirement tax planning. Modeling how a qualified annuity, its RMDs, and a multi-year conversion plan interact is exactly the kind of analysis a fiduciary can run on your specific numbers.
Only if it is a qualified annuity held inside an IRA, 401(k), or similar pre-tax account. Those follow the standard RMD schedule at age 73 or 75. A non-qualified annuity bought with after-tax money has no lifetime RMD.
Are non-qualified annuities subject to RMD?
No. A non-qualified annuity is funded with dollars you already paid tax on, so there is no required minimum distribution during the owner’s lifetime. The owner decides when to take income.
At what age do annuity RMDs start?
For a qualified annuity, RMDs begin at age 73 for those born between 1951 and 1959, and at age 75 for those born in 1960 or later, under SECURE 2.0. The first distribution can be delayed to April 1 of the following year.
Do annuity payments count toward my RMD?
For the annuitized contract itself, yes: the scheduled payments generally satisfy that contract’s RMD. Under the longstanding default rule, however, those payments are not pooled with the RMDs from your other account-based IRAs.
Can an annuity satisfy the RMD for my whole IRA?
Not automatically. An annuitized contract’s payments cover that contract. Whether annuity payments can offset RMDs on separate IRAs is the subject of proposed IRS regulations, so retirees typically confirm current guidance before relying on that treatment.
Does a Roth IRA annuity have RMDs?
No. A Roth IRA has no RMD during the original owner’s lifetime, and that holds true even when the Roth IRA holds an annuity contract.
Can a QLAC lower my required minimum distributions?
Yes. A QLAC premium, capped at an inflation-indexed limit reported at $210,000 for 2026, is removed from the IRA balance used to calculate RMDs until the QLAC income starts, no later than age 85.
What is the penalty for missing an annuity RMD?
The IRS applies a 25% excise tax on the amount you should have withdrawn, reduced to 10% if you correct the shortfall within two years.
About the author
Craig Wear, CFP® is a CERTIFIED FINANCIAL PLANNER professional and founder of Q3 Advisors, a fee-only registered investment adviser specializing in Roth conversion and retirement tax strategy for IRA millionaires and pre-retirees.
Last reviewed: September 2026
Last updated: September 2026
Methodology: figures in this article are drawn from primary sources, including IRS RMD guidance, the Treasury Department final RMD regulations, and the Congressional Research Service summary of SECURE 2.0. Because required minimum distributions are a Your-Money-Your-Life topic, anonymous online forum anecdotes were deliberately excluded and only agency or named-institution sources were used.
This article is for educational purposes only and is not individualized investment, tax, or legal advice. Consult a qualified professional about your specific situation.
Craig Wear
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