How to Delay Withdrawals on Your Retirement Accounts

Have you done well saving, investing and building a nice nest egg for yourself? Your qualified retirement accounts, such as your 401(k) or Traditional IRA, have probably played a big role in helping you accumulate your retirement savings. They allow you to defer paying taxes on your money until you wish to take them, ideally after age 59½ to avoid any government penalty. But what happens when you reach age 70½?

Some people have done such a great job planning their retirement that they have accumulated assets in their qualified retirement accounts that they don't need or want to draw on. However, at age 70½ the government requires you to start drawing a portion of those assets each year for the rest of your life. This is called your Required Minimum Distributions (RMDs). But what about the people who wish there was a way to delay taking their RMDs? Wishes do come true.

Recent changes to U.S. Treasury regulations now allow you to delay taking your RMDs on a portion of your qualified retirement accounts until as late as age 85 by purchasing a Qualifying Longevity Annuity Contract or QLAC. By purchasing a QLAC, you are able to delay taking RMDs to $125,000 or 25% of your aggregate IRA account balances, whichever is less. Even if you have already started taking your RMDs from your retirement accounts, you can still purchase a QLAC and delay taking RMDs on that portion of your assets until as late as age 85.

By purchasing a QLAC, you could give yourself more guaranteed income later in life which can give you more security and confidence in retirement. You could also preserve important benefits in retirement. Social Security and Medicare can be greatly impacted based on the amount of income you claim. For example, up to 85% of your Social Security benefits may be taxable if what the Social Security Administration calls your Combined Income* exceeds $44,000 for those who are married and filing jointly. Medicare Part B premiums can also vary based on your income. If your modified adjusted gross income exceeds $170,000 for those married filing jointly you may be charged a higher premium for your coverage.** QLACs can also help you create a legacy. With a deferred income annuity offered as a QLAC, future payments can be paid over 2 lives (you and your spouse) for better legacy planning. Talk to your financial professional to see if a QLAC could be a good fit for your retirement plan.

Andrew Martin
Founder and President

*Source: Combined Income is your modified adjusted gross income +1/2 of your Social Security benefits.
** Source:
New York Life is not offering a QLAC with direct investment inside an employer sponsored qualified plan. New York Life only offers an IRA version of a QLAC, and therefore requires an IRA balance as of 12/31 of the previous year in order to purchase a QLAC. Neither New York Life, nor its agents or employees offer tax or legal advice. Please consult your professional advisor for tax or legal advice.
^Andrew Martin, Registered Representative offering securities through NYLIFE Securities LLC, Member FINRA/SIPC, a Licensed Insurance Agency, 1110 Montlimar Drive, Suite 1010, Mobile, Alabama 36609, (251) 460-4606.
Atlas Financial Strategies LLC is not owned or operated by NYLIFE Securities LLC or its affiliates.