Q.: I am holding a Roth annuity and considering starting an annual income stream. However, I don’t need this money now so I would like to deposit it back into the Roth account. Does the IRS allow this or do I have to use that money? I know it is NOT taxable because it’s coming from a Roth account. — HS
A.: The word “considering” suggests to me that starting an income stream is something you are choosing to do rather than being required to do. If that is the case, why bother taking anything? You could just leave it be or if you do not like the annuity, get rid of the annuity. There are issues like surrender fees and giving up certain guarantees so you should talk with your adviser about what leaving the annuity entails but there won’t be a tax consequence if you make a change. In your case, the two parties most likely to compel withdrawals from a Roth account are the tax code and the annuity contract. A taxpayer’s personal Roth IRA is not subject to Required Minimum Distributions (RMD). You can leave every penny in your Roth IRA for the rest of your life if you wish. But, if the account is any other type of Roth account s …