Retirement Literacy Foundation · Annuity Education

Annuities in an IRA: RMDs and the 2026 QLAC Limit

By Hans Goldstein, founder, Retirement Literacy Foundation · Updated October 8, 2026

Short answer: An annuity held inside an IRA or 401(k) is subject to the same required minimum distribution rules as the rest of the account. A qualifying longevity annuity contract (QLAC) is the exception: up to $210,000 in 2026 can go into one, and that money is left out of your RMD calculation until income starts, as late as age 85.

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Why put an annuity in an IRA at all

An IRA is already tax-deferred, so an annuity adds no extra tax deferral there. People use annuities inside IRAs for other reasons: a guaranteed rate (a fixed or multi-year guaranteed annuity), protection from market losses (a fixed indexed annuity), or guaranteed lifetime income. Whether those features are worth the trade-offs is the real question; see annuity types, pros and cons.

How RMDs work with an annuity

Before you annuitize: the annuity's value is part of your IRA balance. RMDs start at 73 (born 1951 through 1959) or 75 (born 1960 or later). The required amount is based on the December 31 value, which for some contracts includes the value of extra benefits such as an income rider.
After you annuitize: the scheduled payments themselves satisfy the RMD for that annuity, as long as they meet the IRS payout rules.
You can take the RMD from another IRA instead, as long as the total from all your IRAs meets the requirement. See the RMD calculator.

The QLAC: delaying RMDs on part of your IRA

A QLAC is a deferred income annuity bought inside an IRA or 401(k). The premium is excluded from the balance used to figure your RMDs until payments begin, which must be no later than age 85.

Limit: $210,000 per person for 2026 (unchanged from 2025, IRS Notice 2025-67). SECURE 2.0 removed the old rule that capped it at 25% of the account.
Trade-off: the money is locked up until income starts, and the income is fully taxable when paid.
Why people use it: it lowers RMDs in your 70s and early 80s, which can keep income under tax brackets and IRMAA lines, and it insures against running out of money late in life.

Roth IRAs

An annuity in a Roth IRA follows Roth rules: no RMDs for the original owner, and qualified withdrawals are tax-free. See the Roth conversion calculator if you are weighing conversions.

Common questions

Do annuities have RMDs?

Annuities inside an IRA, 401(k) or other retirement account do. A non-qualified annuity bought with after-tax money has no RMDs during the owner's life.

What is the QLAC limit for 2026?

$210,000 per person, the same as 2025, per IRS Notice 2025-67.

Can I take my RMD from a different IRA instead of the annuity?

Yes, as long as the total withdrawn from all your IRAs meets the combined requirement. 401(k) RMDs must be taken from each plan separately.

More on annuities: How Do Annuities Work? A Plain-English Guide · How Are Annuities Taxed? · Inherited Annuity Taxes · 1035 Exchange · Annuity Surrender Charges and How to Get Out of an Annuity · Types of Annuities and Their Pros and Cons · What Is a MYGA? Multi-Year Guaranteed Annuities Explained · Fixed Index Annuity Explained · Immediate Annuity (SPIA) Explained · Variable Annuity Explained · Annuity vs CD

Education only; nothing is sold here and no product is recommended. Hans Goldstein, founder of the Retirement Literacy Foundation, is also a licensed California insurance producer (#4273294). Tax rules depend on your situation; check with a tax professional before acting.