My Advisor Recommended an Annuity. Should I Buy It?

Nov 19, 2025

Explore the ins and outs of required minimum distributions (RMDs) and why they matter for retirement savings. Learn about the different age thresholds and calculation methods based on IRS tables. Discover strategies to minimize future RMDs and the implications for long-term planning. Plus, delve into the pros and cons of annuities—what to consider before committing to one. Roger also answers listener questions on gifting safely without compromising retirement security, ensuring a well-rounded approach to financial planning.

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INSIGHT

Why RMDs Exist And How They're Calculated

Required minimum distributions (RMDs) force you to withdraw pre-tax retirement funds starting at specified ages depending on your birth year.
The IRS uses year-end balances and life-expectancy tables to calculate the annual RMD amount.

ADVICE

Calculate RMDs From Year-End Balances

Calculate RMDs using the prior year-end balance divided by the IRS uniform life-expectancy factor for your age.
Use online calculators from firms like Schwab or Fidelity to avoid manual errors.

ADVICE

Don't Miss The RMD Deadline

Take your RMD by December 31 each required year to avoid an excise tax that was recently reduced from 50% to 25%.
If you miss it, act fast to qualify for a reduced 10% penalty or request IRS mercy for reasonable cause.

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💬 Show Notes

In this episode, Roger Whitney dives into the essentials of required minimum distributions, explaining the age thresholds, how the amounts are calculated using IRS life expectancy tables, and how to manage multiple IRAs and 401(k)s. He also answers listener questions, including whether a flexible premium deferred income annuity might make sense and how to determine how much you can safely give to loved ones or charity now. Packed with practical advice and actionable insights, this episode helps listeners navigate the rules and strategies that can impact their retirement planning.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

(00:00) This show is dedicated to helping you have the confidence to rock retirement.

THE RETIREMENT TOOLBOX

(01:18) In this Retirement Toolbox segment, we take a timely look at required minimum distributions—what they are and how they work for the accounts you own.
(03:22) A quick breakdown of the current IRS rules for required minimum distributions, outlining the different start ages based on your birth year.
(05:22) How RMDs are calculated using your year-end balance and IRS life expectancy tables.
(08:30) When should you take your money out, and what happens if you don’t?
(10:48) How to handle RMDs across multiple IRAs and 401(k)s and why long-term planning and account consolidation matter.
(14:00) What are some strategies to minimize or mitigate your future required minimum distributions?

LISTENER QUESTIONS

(15:23) Submit your questions through AskRoger.me, and we’ll help you take a baby step toward a rock-solid retirement.
(15:54) Our title question comes from Rich, who asks if a flexible premium deferred income annuity would be a good idea given his retirement savings, Social Security, pension, and minimal debt.
(27:14) A listener asks how to determine how much they can safely give to loved ones or charity now, rather than leaving it as an inheritance later.

SMART SPRINT

(33:22) In the next seven days, estimate your future RMD—even if it’s 10 years away—assuming your IRA or 401(k) grows at a reasonable rate.

CLOSING THOUGHTS

(34:04) An update on the merger of Tanya Nichols’ and Roger’s advisory firms, with a new unified brand—Retire Agile—coming in 2026 and opportunities for client feedback on branding and design.

REFERENCES