All,

I found the discussion in this thread simply too complicated:

viewtopic.php?f=10&t=106832

So, my question is: Suppose I have $500,000 in a traditional IRA. It is invested in only one fund, Vanguard LifeStrategy Moderate Gr Inv: VSMGX.

I am contemplating taking some of those savings to buy a Single Premium Immediate Annuity (SPIA) that yields 7%. I am interested in assured income for life. Let's assume I take half, $250,000, to generate $17,500 of yearly income.

Can I buy the SPIA inside the IRA and put the SPIA "income" back in the IRA with no tax consequences? Then, can I withdraw from the IRA as I need it (or to meet RMD) and pay tax only on the withdrawals?

Is this even a viable option to think about?

By the way, I am interested only in the mechanics, legality, and tax consequences, not in the behavioral aspects of SPIAS.

Keith

PS: Even asking the question makes my head hurt. I can't imagine what the answers will be.