How to Reduce Taxable RMDs and Improve Your Retirement Income Plan at the Same Time
Adding annuity payments to your IRA withdrawals could save on taxes and help ensure a stable cash flow throughout your retirement. With that in mind, here’s a QLAC strategy to consider.
A reporter called me to ask whether investing in a QLAC would reduce a retiree’s RMDs and the tax that must be paid on them. (Regulations demand that you begin taking these required minimum distributions — and pay taxes on them — from your 401(k) or IRA beginning at age 70½.)
The short answer is yes.
The complete answer is, think about the QLAC decision as part of a broader consideration of your retirement finances.
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