If You Have an Annuity Inside Your IRA, Your RMD May Be Lower Than Boldin Shows
This article explains the new regulation and provides instructions around how to adjust your RMD projection in Boldin
What's going on
A 2022 law (SECURE 2.0 Act) changed how required minimum distributions (RMDs) are calculated for a specific situation: when you've converted part of a Traditional IRA into a guaranteed income annuity while keeping the rest in standard investments.
Under the old rules, your annuity income and your remaining IRA balance were treated as two separate buckets — each with its own RMD calculation. Under the new rules (effective January 1, 2025), you're allowed to look at both together and calculate one combined RMD. If your annuity payments are already covering a large portion of that combined obligation, you may owe little or nothing in additional withdrawals from your remaining IRA balance.
Boldin currently calculates RMDs on your non-annuitized IRA balance independently, without factoring in annuity income from the same account. This means your projected RMD — and your projected taxable income — may be higher than what you're actually required to take.
Does this apply to you?
All three of the following must be true:
You have a Traditional IRA — this does not apply to Roth IRAs or to annuities purchased with after-tax money outside of a retirement account.
You've partially annuitized that IRA — meaning you converted a portion of your Traditional IRA into a lifetime income annuity, while leaving the rest in standard investments (mutual funds, bonds, etc.).
Both the annuity income and the remaining IRA balance are in your Boldin plan — entered as separate items, with the IRA balance generating its own RMD projection.
If all three are true, Boldin is likely overstating your required withdrawal and your taxable income in the years affected.
What you can do now
Until Boldin builds native support for this calculation, you can approximate the correct result manually. Here's how.
Step 1: Get the present value of your annuity from your insurer
Contact the insurance company that issued your annuity and ask for the present value of your annuity contract — sometimes called the "account value for RMD purposes." This is a specific number the insurer is required to calculate. It is not the same as your annual income amount.
Step 2: Reduce your IRA balance in Boldin
In your Boldin plan, find the Traditional IRA account that was partially annuitized. Subtract the present value of the annuity (from Step 1) from the balance you have entered. Update the balance to reflect only the non-annuitized portion.
This removes the annuitized portion from Boldin's RMD calculation, which is the correct treatment under the new rules. Your annuity income continues to run separately in your plan as it already does.
Step 3: Note this adjustment for future updates
The present value of your annuity will change over time. You'll want to revisit this adjustment periodically — at minimum each year when you update your plan balances — and request an updated present value from your insurer.
A practical example
A 74-year-old has:
$250,000 annuitized inside a Traditional IRA, paying $14,000 per year
$200,000 remaining in a non-annuitized Traditional IRA
What Boldin currently shows: An RMD of approximately $7,547 from the non-annuitized IRA — calculated on the $200,000 balance alone.
What the IRS now allows: A single combined RMD calculated on the full $450,000, which comes to approximately $16,981. Since the annuity is already paying $14,000, the actual required withdrawal from the remaining IRA is only about $2,981.
The workaround in action: The user requests the present value of the annuity contract from their insurer — say it's $248,000. They reduce their IRA balance entry in Boldin from $200,000 to a net figure that reflects this adjustment, and Boldin recalculates the RMD accordingly.
Important notes
This is a manual approximation, not an automated calculation. The result will be close but not exact without the precise present value from your insurer.
Consult a tax professional. The blended RMD calculation involves IRS rules that interact with your specific annuity contract. A tax advisor or CFP can help you apply the correct numbers to your situation before you file.
This applies to Traditional IRAs only. If your annuity is inside a 401(k) or 403(b), different rules apply and the blended approach described here is not available across separate employer plan accounts.
Boldin is working to improve this. We're evaluating how to model partially annuitized IRAs more accurately in a future update. Keep an eye on our Release Notes. Enhancements are prioritized according to the numbers of users impacted.
Questions?
If you're not sure whether this applies to your plan, or you'd like help thinking through the adjustment, reach out to our support team or speak with a Boldin coach.