Defer Your Minimum Required Distributions with QLACs

Do you want to defer unwanted Required Minimum Distribution (RMDs) from your IRA after age 70½…? Well, now you can and at the same time avoid those unnecessary federal and state income taxes.

RMD rules require all individuals with qualified money to take distributions from those accounts beginning at age 70½, with respect to a portion of their total retirement savings, whether they need the income or not. In July 2014, the U.S. Treasury Department removed a significant impediment to the ability of qualified plan participants and IRA owners to balance their use of annuities and other investments in their retirement plans by issuing final regulations that allow individuals to bypass Required Minimum Distribution (RMD) rules.

The new regulations allow individuals to essentially defer a percentage of their RMD distributions and the taxes associated with those distributions with no penalty! The individual establishes a Qualified Longevity Annuity Contract, or “QLAC,” a guaranteed deferred annuity, under which the amount of annuity payments is locked in at purchase, and those payments can be deferred at a later date up to age 85.