RMD friendly describes annuity or investment products, strategies, or custodial platforms that make it easier for owners of tax-deferred retirement accounts to meet required minimum distribution (RMD) rules. RMD-friendly features include automated calculation and withdrawal services, flexible payment scheduling, and the ability to coordinate distributions across multiple accounts. In the annuity context, RMD-friendly contracts are designed so that taking required distributions does not unnecessarily penalize riders, guarantees, or surrender charge schedules, within product constraints and tax rules.

Advisors use the term RMD friendly when comparing products for clients approaching RMD age. They evaluate whether contracts allow systematic withdrawals at least equal to RMDs without triggering extra charges and how income riders or death benefits adjust as withdrawals occur. Custodians and insurers that offer consolidated RMD calculation tools are often described as more RMD friendly than those requiring separate manual calculations. Highlighting RMD-friendly features helps clients see that their retirement income plan can stay compliant with tax rules while still pursuing growth or income objectives. It also reduces administrative headaches for both clients and advisors.