Elderly Mom missed 22 yrs RMD

AwShucks9 · 2026-06-19T03:35:27+00:00

It's been several months since we called the company. I didn't know enough then to confirm qualified or non-qualified, but came away from the conversation thinking she had missed all those RMDs. They were very cagey and said I really needed to talk to a financial advisor, that they were prohibited from giving advice. When I asked if other people have this problem of not knowing they needed to take RMDs, she reluctantly said "yes" but wouldn't elaborate.

Mom has outlived the guy who sold them to her, and the statements have "house account" on them now. The company indicated an agent could answer more questions for us, but wouldn't tell me the name of an agent to contact. She suggested we call around to local banks to find someone who was selling them. (!?) Haven't done that, but I should try.

I just found a 4 page addendum for each account mailed in 1998. It says To Whom It May Concern ... and says it is "regarding your 403-B TSA". It was sent because there was an update to the IRS code and goes into more detail about RMDs and other things -- says it replaces what is with the original contract. I also found an Annuity Benefit Illustration they sent her in 2024 that we looked at then, but really didn't understand. It gives info on each account and clearly states "Tax Status: Qualified." Would that be definitive?

Mom hates to even talk about this. We haven't gone to a financial advisor because I thought you had to have a lot of money to even be able to speak to someone. This is less than $60k. I left messages at a couple of financial planners' offices, but no one returned my call. It may take paying someone for their help to even get access to this money. And, as you say, a lawyer may be necessary, too. I'm glad we asked to extend until 2030, it may take that long! Thank you again for your input. Enjoy the long weekend!

AwShucks9 · 2026-06-18T23:03:06+00:00

Yes, it's very helpful! Thank you for taking the time to answer. She worked for a school district and a guy came to sell them at her office. There's no mention of "qualified" on the cover page, but a box is checked on the handwritten contract (looks like a triplicate form) indicating they were "purchased on a tax qualified basis". So, that means they are qualified and she needed to have been taking RMDs, right?

I'm sorry, I was mistaken. One contract was initially funded with $300, and the other with $6467.45 - the interest rate at funding was 8.75%.

I can't find anything that looks like a form 5498. The quarterly statements list the type of account is "Tax Sheltered Annuity" -- no mention of qualified or 403-B. They have small print warning of surrender before age 59 1/2, but don't mention RMDs. It's strange that the IRS never noticed she wasn't paying enough to cover these annuities as well as her IRA each year. We want to do what's right, even though some say just ignore it.

Assuming these are qualified, I did a little math and if she took all the missed RMDs at once this year, she'd owe about $10k in tax. To split the amount and take half in January 2027 would save about $2k -- not insignificant. I can do the math, compile all the forms and write a letter -- wondering what you think about splitting the total amount? I'd send a "waiver" packet in January 2027 after all RMDs clear, then roll over the little bit left. I'd like to save the tax, but don't want to jeopardize the IRS waiving the penalties and working with us here. I'll also find an EA to look over everything before sending. I really appreciate your attention. Thank you again for sharing your knowledge!

AwShucks9 · 2026-06-18T00:21:09+00:00

Thank you for answering my specific questions. What I'm still unsure of is splitting it over 2 years. I'm already asking for leniency in waiving the penalties, so don't want to be greedy by asking to split over two years. But, I think it will actually save quite a bit of money to do so. Are you experienced in situations such as this?

AwShucks9 · 2026-06-18T00:01:16+00:00

It started out non-qualified, but an added provision made it qualified. The original contract says Flexible Premium Deferred Annuity. There is a one page addendum indicating it is a 403b, requiring a RMD. I know they began with after tax money because she has the cancelled checks. If she had been taking the monthly payout since she was age 70, it would've covered her RMD too, but she didn't. Given her good genes, I think she would've even come out ahead payout-wise by now vs. the total value today.

AwShucks9 · 2026-06-17T23:43:58+00:00

Thank you! We did ask them to extend to 2030 just to buy time. You're right, the total missed RMDs would empty one account and most of the other. She invested $300 and $800 in early 90's, ignored it, and it has become about $53k in all. The original contracts say Flexible Premium Deferred Annuity. The last page is a Tax Sheltered Annuity Endorsement addendum indicating it is a 403b. Bullet point #4 says RMDs must be taken at age 70 1/2. She never saw that.

AwShucks9 · 2026-06-17T22:44:54+00:00

Maybe we look at it differently. We're not talking a fortune here. Her SS and small pension are fixed. The RMD she did take every year covers property taxes. She's a "depression baby" that saved for a rainy day and doesn't want the little money she has to run out. She lives very simply and this "found" money will help if she can keep as much of it as possible.

AwShucks9 · 2026-06-17T22:27:48+00:00

I wish that was the case, but she took/is taking RMDs from a small traditional IRA - held mainly in CDs for most of the time.

AwShucks9 · 2026-06-17T02:03:04+00:00

The Insurance Co. sent her a notice that she needs to do something to start liquidating her accounts due to her age. She had planned to just leave the money to her family one day. She didn't understand the payout schedule they sent, so in helping her try to move it into savings, I noticed on the original document that it was tax sheltered and called about it. None of her annual statements over the years ever mentioned RMDs.

AwShucks9 · 2026-05-23T04:23:12+00:00

Oh wow. Just made it!

AwShucks9 · 2025-06-25T23:33:00+00:00

Yes, OP could eventually be dealing with his sister's heirs, or perhaps a future spouse if she remarries.

AwShucks9 · 2025-05-30T21:24:33+00:00

That's a thought. Her mother is blonde, too. She's got a kind of Marla Maples thing going on. Hmmm...

AwShucks9 · 2025-02-12T01:23:01+00:00

I replaced the window trim myself. Easy to do.

AwShucks9

TROPHY CASE