Rollover IRA to QLAC to avoid RMD
Can you roll IRA assets into a QLAC to avoid RMD? I have a client who is over 70 1/2 and wants to extend his RMD further to age 85 with a QLAC.
Can you roll IRA assets into a QLAC to avoid RMD? I have a client who is over 70 1/2 and wants to extend his RMD further to age 85 with a QLAC.
Permalink Submitted by Alan - IRA critic on Mon, 2015-08-31 18:30
The max IRA QLAC is 125,000, but not more than 25% of the total value of their owned IRA accounts. The QLAC would be held in a separate IRA account essentially as a deferred annuity, and the value of that account would not be included in year end IRA values for RMD computation purposes. The current year RMD would not be affected, so the RMD reduction would begin in the CY following the QLAC purchase. Note that once the QLAC begins payout around age 85, the total taxable IRA RMD distributions will increase.