Are Annuities Subject to RMDs? 2026 Rules

In this guide

The wrapper decides, not the product
Every contract type, side by side
Qualified but not annuitized: the fair-market-value trap
Annuitized contracts: the payments are the RMD
Do annuity payments count towards your other RMDs?
The QLAC exception, and its 2026 limit
Do non-qualified annuities have RMDs?
When a QLAC reduces lifetime tax — and when it only defers it
What you are paying for the deferral
What an annuity RMD calculator can and cannot do

The wrapper decides, not the product

The required minimum distribution rules live in Code §401(a)(9) and reach exactly three categories of money: employer plans, traditional IRAs, and IRA-based plans such as SEPs and SIMPLEs (IRS RMD FAQs). Nothing in that list is about what the account holds. An index fund, a certificate of deposit and a fixed indexed annuity in the same IRA are treated identically. So the useful question is not "are annuities subject to RMDs" but "which bucket is my annuity in?"

Qualified annuity — the contract is titled as, or held inside, an IRA or an employer plan. Pre-tax money. RMDs apply from your required beginning date, currently the year you reach 73.
Non-qualified annuity — bought with money on which you have already paid tax, held in your own name outside any retirement account. No lifetime RMDs.
Roth — an annuity in a Roth IRA has no RMDs while you are alive, and since 2024 neither does one in a designated Roth account inside a 401(k) or 403(b). Beneficiaries are a different matter.

Everything else on this page is a refinement of that three-way split. If you want the arithmetic and reporting of the RMD itself rather than the annuity mechanics, that belongs to the RMD taxes guide; the broader menu of ways to shrink the bill lives in how to avoid taxes on your RMD.

Every contract type, side by side

Annuity contract type versus RMD treatment — owner living unless stated
Contract and where it sits	Lifetime RMD?	How the amount is determined
Deferred annuity in a traditional IRA (fixed, indexed or variable), not yet annuitized	Yes	Prior 31 December fair market value — account value plus the actuarial value of riders — divided by your life expectancy factor.
IRA annuity that has been annuitized (income turned on)	Yes	The payment stream itself satisfies the RMD for that contract. No factor, no separate calculation.
Immediate annuity (SPIA) bought with IRA money	Yes	Same as above — annuitized from day one.
QLAC in an IRA or plan	Deferred	Value is excluded from the RMD balance until payments begin, no later than the month after age 85.
Annuity inside a 401(k), 403(b) or 457(b)	Yes	Plan-level rules; each plan's RMD must be taken from that plan, not aggregated with IRAs.
Annuity in a Roth IRA	No	No RMDs during the owner's lifetime. A QLAC may not be held in a Roth IRA.
Non-qualified deferred annuity	No	None ever, during life. Post-death distributions are governed by §72(s).
Non-qualified immediate annuity	No	Payments are contractual, not required by tax law. Each payment is split by the exclusion ratio.
Inherited annuity (either wrapper)	Yes, on the beneficiary	Qualified: the SECURE Act beneficiary rules. Non-qualified: §72(s). Two different schedules.

Sources: IRS RMD FAQs; Reg. §1.401(a)(9)-6; Publication 590-B; IRC §72(s).

Qualified but not annuitized: the fair-market-value trap

Most annuities in IRAs are deferred contracts that have never been turned into income. For RMD purposes they behave like any other IRA asset — with one important difference in how the balance is measured.

The regulation does not use your account value. It uses your entire interest in the contract, which under Reg. §1.401(a)(9)-6 means the dollar amount credited to you plus the actuarial present value of any additional benefits the contract provides — an enhanced or stepped-up death benefit, a guaranteed minimum income or withdrawal benefit, a return-of-premium guarantee. Those riders have value, and the regulation makes you count it.

The 120% screen. The actuarial value of additional benefits may be disregarded only where the account value plus that actuarial value comes to no more than 120% of the account value, and the benefits satisfy the regulation's further conditions. Above that line, the actuarial value must be added to the RMD base. In practice: a contract with a rich living-benefit rider can carry an RMD base meaningfully higher than the number printed on your quarterly statement — and the insurer, not you, calculates it.

Two consequences. Ask the carrier for the prior 31 December fair market value rather than reading the statement; that is the figure they report to the IRS. And taking the RMD from the annuity itself can collide with a surrender-charge schedule or a bonus recapture — many contracts waive charges up to that contract's RMD, but the waiver is a contract term, not a tax rule. Because IRA RMDs may be totalled and taken from any one IRA (IRS RMD FAQs, Q5), the usual answer is to satisfy the whole year's IRA requirement from a liquid IRA and leave the annuity alone.

Annuitized contracts: the payments are the RMD

Once a qualified contract is annuitized — irrevocably converted into a stream of payments over your life, joint lives, or a permitted period certain — it stops having a balance to divide. Reg. §1.401(a)(9)-6 instead treats the payment stream as satisfying §401(a)(9) for that contract, provided the payment form meets the regulation's conditions: payments at least annually, non-increasing except for the increases the regulation specifically permits, and a period certain within the prescribed limits.

So the honest answer to "do annuity payments count towards RMD" is yes, for that contract. You do not look up a factor or compare the payments to what a divisor would have produced. The payments are the requirement.

Do annuity payments count towards your other RMDs?

This is the part that costs people money, and the honest position in 2026 is that it is in transition.

The long-standing rule. An annuitized IRA annuity stands alone. Its payments cannot be used to satisfy the RMD owed on your other IRAs, and — because it no longer has an account balance — it contributes nothing to the pool those other RMDs are calculated from. A retiree who annuitizes one IRA and assumes the monthly cheque covers the household's whole RMD obligation has a shortfall on the rest, and the excise tax on a missed RMD is 25%, reduced to 10% if corrected within the two-year window on Form 5329.

What SECURE 2.0 §204 changed. Section 204 directed Treasury to amend the regulations so that where part of an account is held in an annuity contract, the owner may elect to aggregate the annuitized and non-annuitized portions: value the annuity portion, add it to the remaining account balance, compute a single RMD, and credit the annuity payments already received against it. Excess annuity payments can then offset what would otherwise be due from the non-annuitized side. Publication 590-B now describes that election.

State this one carefully. The statutory provision has been effective since 29 December 2022, but the implementing rule sits in the July 2024 proposed regulations (REG-103529-23), not the final ones. In Announcement 2026-7 the IRS said the future final regulations amending Regs. §§1.401(a)(9)-4, -5 and -6 will apply for a distribution calendar year beginning no earlier than six months after they appear in the Federal Register, and that in the interim taxpayers must apply a reasonable, good-faith interpretation of the underlying statute. Translation: the aggregation election is available on a good-faith basis, the mechanics are not yet locked down, and whether your custodian and insurer will actually administer it is a separate question worth asking in writing before you rely on it.

Employer plans are stricter regardless. RMDs from a 401(k) or 457(b) must be taken from each plan separately and can never be aggregated with IRAs; 403(b) contracts may be totalled among themselves.

The QLAC exception, and its 2026 limit

The one route the tax code deliberately provides for shrinking RMDs with an annuity is the qualifying longevity annuity contract. A QLAC is a deferred income annuity bought inside an IRA or plan that meets the conditions in Reg. §1.401(a)(9)-6(q). Meet them, and the contract's value is excluded from the account balance used to compute your RMDs until the payments begin.

Premium cap. Total QLAC premiums across all your IRAs and plans are limited to $210,000 in 2026 — unchanged from 2025, confirmed at §1.401(a)(9)-6(q)(2)(ii) in IRS Notice 2025-67. It is a per-person limit, so spouses each have their own.
The old 25% cap is gone. Section 202 of SECURE 2.0 removed the percentage-of-balance limit and raised the dollar cap, and the July 2024 final regulations (T.D. 10001) wrote it into the rules.
Latest start date: age 85. Payments must begin no later than the first day of the month following your 85th birthday. You may elect earlier.
It must be a plain fixed contract. No cash surrender value, and it may not be a variable, indexed or similar contract.
Death benefits are constrained. Broadly, a return of premiums paid, or a life annuity to a beneficiary. A spouse may be the sole beneficiary of a joint-and-survivor QLAC, and SECURE 2.0 permits a joint-and-survivor contract to continue for a former spouse under a divorce decree or QDRO.
Not in a Roth IRA, which has no lifetime RMDs to reduce in the first place.
Paperwork. The insurer must report the contract to you and the IRS on Form 1098-Q, and the final regulations provide a rescission window of up to 90 days.

When payments start they are ordinary income, and they are themselves the RMD for that contract. Nothing has been forgiven — the income has been moved.

Do non-qualified annuities have RMDs?

No. This deserves its own heading because the search results on it are unusually poor.

A non-qualified annuity is purchased with money that has already been taxed. It is not an IRA and not a retirement plan, so §401(a)(9) simply does not reach it. There is no required beginning date, no life expectancy factor, no age 73 event, and no 25% excise tax. You can leave a non-qualified deferred annuity untouched for your entire life. Only the earnings are taxable when you do withdraw, and non-annuitized withdrawals come out earnings-first under §72(e); annuitized payments are split between return of basis and income by the exclusion ratio. General ordering and rate mechanics are in the retirement withdrawals and taxes guide.

What does apply is Code §72(s), a distinct set of post-death required distributions that annuity contracts must contain to be treated as annuities at all:

Death on or after the annuity starting date — the remaining interest must be distributed at least as rapidly as under the method in force at death.
Death before the annuity starting date — the entire interest must be distributed within five years.
The life-expectancy exception — if the interest is payable to a designated beneficiary who is an individual, it may instead be paid over that beneficiary's life or life expectancy, provided payments begin within one year of death. This is the "non-qualified stretch," and it survives: the SECURE Act's 10-year rule rewrote the beneficiary rules for IRAs and plans, but it did not amend §72(s).
Spousal continuation — where the surviving spouse is the designated beneficiary, the spouse may be treated as the holder and simply carry the contract on.

Two cautions. The stretch is a tax-law permission, not a contract guarantee — the carrier must actually offer it, and the election is usually time-limited to that one-year window. And an inherited qualified annuity follows an entirely different track: see the inherited IRA RMD rules.

When a QLAC reduces lifetime tax — and when it only defers it

A QLAC lowers the RMD base for however many years lie between purchase and the start of payments. Whether that lowers lifetime tax or merely relocates it depends on one comparison: your marginal rate in the deferral years against your marginal rate from 85 onwards.

It tends to help where RMDs in your seventies would land in a materially higher bracket than the income you expect in your late eighties — a household still drawing consulting income, or one that will lose a large pension or a spouse's Social Security along the way. It tends to be a wash, or worse, where the reverse is true: a single survivor filing at compressed brackets in their late eighties, receiving a concentrated annuity income plus Social Security, can face a higher marginal rate than they were avoiding.

Then there is Medicare. Premiums are set on a two-year lookback of modified adjusted gross income, so a QLAC's deferral years may keep you under an IRMAA threshold — and the payment years may push you over one. Model both ends of the arc, not just the near one; the thresholds and the surcharge mechanics are in the IRMAA guide. A QLAC is also only one instrument among several; qualified charitable distributions and gap-year Roth conversions often do more, sooner, and are compared side by side in how to avoid taxes on your RMD.

What you are paying for the deferral

Risk and cost disclosure. Annuities are insurance contracts, and the tax treatment described here says nothing about whether one is suitable. Deferred contracts can carry mortality and expense charges, rider fees and multi-year surrender schedules. A QLAC has no cash surrender value at all — the premium is unreachable, permanently, from the day it is paid. Payments depend on the claims-paying ability of the issuing insurer; state guaranty association coverage exists but is limited and varies by state. Level payments beginning fifteen or twenty years out are exposed to inflation, and if you die before the start date only a return-of-premium or joint-and-survivor feature returns anything, generally without interest. This page is product-neutral and recommends no contract, carrier or strategy.

What an annuity RMD calculator can and cannot do

A general RMD calculator works fine for a deferred qualified annuity provided you feed it the right number: the prior 31 December fair market value from the insurer, including any actuarial value of riders, not the account value on your statement. Get that input wrong and every figure downstream is wrong.

No calculator handles the three cases that matter here. It cannot compute an RMD for an annuitized contract — there is no balance to divide. It cannot model the §204 aggregation election, whose mechanics are not yet final. And it should not be pointed at a QLAC, excluded from the base until payments begin. Use the calculator to price the tax on the year's distributions, and treat the annuity mechanics above as the layer on top.

Go deeperPrice what this year's distributions actually cost →

Frequently asked questions

It depends on the wrapper, not the product. An annuity held inside a traditional IRA, SEP, SIMPLE, 401(k) or 403(b) is subject to the required minimum distribution rules of Code section 401(a)(9) like any other asset in that account. An annuity you bought with after-tax money outside a retirement account — a non-qualified annuity — has no lifetime RMDs at all. A qualifying longevity annuity contract sits in between: it is qualified money, but its value is excluded from the RMD calculation until payments begin, which can be as late as age 85.

For the contract that is paying them, yes. Once a qualified annuity has been annuitized into a permitted payment stream, those payments are treated as satisfying the RMD for that contract — there is no separate calculation and no life expectancy factor to apply. The trap is what they do not cover. Under the long-standing rule, payments from an annuitized IRA annuity cannot be used to satisfy the RMD owed on your other IRAs, and the annuitized contract no longer contributes a balance to the pool those RMDs are figured on. Section 204 of SECURE 2.0 created an election to aggregate the annuitized and non-annuitized portions, but the implementing regulation is still in proposed form.

No. A non-qualified annuity is bought with money that has already been taxed, so it is not a retirement plan or an IRA and section 401(a)(9) never reaches it. You are not required to take anything at 73, at 75, or ever during your lifetime. What does apply is Code section 72(s), a separate set of required distributions that begin at the owner's death: broadly, the interest must be paid out within five years, or over the beneficiary's life expectancy if payments start within one year of death, with a special rule letting a surviving spouse simply continue the contract.

A fixed annuity is subject to RMDs if — and only if — it is held in a tax-deferred retirement account. Fixed, fixed indexed and variable contracts are treated identically for this purpose; the question is never what the contract invests in, only whether the money inside it is pre-tax retirement money. One consequence catches people out: a fixed deferred annuity in an IRA that has not been annuitized still generates an RMD every year, and that RMD may have to come out of the contract even where a surrender charge or a bonus recapture applies.

You can defer part of them, not avoid them. A qualifying longevity annuity contract lets you move up to $210,000 in 2026 out of the balance your RMD is calculated on, across all your IRAs and plans combined, and postpone income from that money until as late as the first day of the month after your 85th birthday. That lowers RMDs in the years before payments start. It does not erase the tax — the payments are ordinary income when they arrive, and they arrive concentrated into later years. A QLAC is a deferral and longevity tool, not a tax-avoidance one.

On the contract's fair market value, which is not always the account value on your statement. Under Reg. section 1.401(a)(9)-6, the entire interest in a deferred annuity contract includes the dollar amount credited to you plus the actuarial present value of any additional benefits the contract provides, such as an enhanced death benefit or a guaranteed lifetime withdrawal rider. That actuarial value may be disregarded only where the total does not exceed 120% of the account value and the benefits meet the regulation's conditions. Ask the insurer for the prior 31 December fair market value rather than reading the balance off your statement.