Annuities✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Which statement about required minimum distributions (RMD) and annuities is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Qualified retirement plans, including IRAs funded with annuity contracts, must satisfy required minimum distribution rules, which compel distributions to begin by the applicable age. Nonqualified annuities, purchased with after-tax dollars outside a qualified plan, are not subject to RMD rules and can continue to accumulate on a tax-deferred basis without a mandatory start date. This difference is a major factor when comparing qualified and nonqualified annuity funding.
Why the other options are wrong
- B) Qualified-plan annuities must follow RMD rules; it is the nonqualified annuity that escapes them.
- C) Nonqualified annuities have no mandatory distribution age under federal law.
- D) RMD rules apply to qualified plan balances regardless of whether the annuity is immediate or deferred.
Memory hook
RMD chases qualified money; nonqualified annuities dodge the deadline — no required start date.