RMD-friendly annuity is a marketing term for an annuity contract held in a qualified account that is specifically structured to work smoothly with required minimum distribution (RMD) rules. Such annuities typically permit systematic withdrawals that satisfy RMDs without incurring additional withdrawal penalties beyond standard tax treatment, and they may offer tools to calculate the RMD amount each year. Product design aims to preserve income riders, death benefits, and surrender schedules as much as possible while owners take required withdrawals in retirement. The term does not change underlying IRS rules but highlights user-friendly features.

In discussions with older clients, advisors highlight RMD-friendly annuities as solutions that combine guarantees, principal protection, or structured growth with straightforward RMD administration. They compare how different contracts handle withdrawals in relation to income rider bases, roll-up rates, and death benefits. Suitability and best-interest documentation note the importance of both meeting RMD obligations and maintaining long-term income security. Knowing which carriers and products are genuinely RMD friendly helps advisors avoid unpleasant surprises when clients reach distribution age and must begin taking required withdrawals from annuity contracts.