RMDs and guaranteed income in your Traditional IRA.
By Ken Arvidson, MSFS, CLU
March 5, 2015
The IRS has issued new guidelines to help guarantee income in your retirement, and at the same time reduce your Required Minimum Distribution requirement every year!
Qualified Longevity Annuity Contracts (QLACs) allow you to put up to the lesser of 25% or $125,000 of your Traditional IRA balance into a Deferred Income Annuity (DIA) eliminating your RMD by that amount, deferring your distribution up to Age 85, and guaranteeing a monthly income!
Take a look at this example:
A 70-year-old male repositions $100,000 to a QLAC with a Return of Premium for a $2400 monthly income and 3% annual bump at Age 85.
He takes a Life Option and 3% bump at Age 85 for a $3,000 monthly income. He could use the $600 monthly difference to fund $200,000 of life insurance.
It’s your choice, and there are lots of options. Contact us for more information and advice.
Email Ken if you need guidance.
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