New Treasury rule
According to an article by moneypower @ Kiplinger.com, you can now invest up to 25 percent of an IRA or 401k balance–to a maximum of $125,000–without having to take RMDs on that money. Could someone explain the ruling please.
According to an article by moneypower @ Kiplinger.com, you can now invest up to 25 percent of an IRA or 401k balance–to a maximum of $125,000–without having to take RMDs on that money. Could someone explain the ruling please.
Permalink Submitted by Richard Partin on Thu, 2017-02-16 14:33
This is a new Treasury rule on my last post
Permalink Submitted by Alan - IRA critic on Thu, 2017-02-16 16:45
You are referring to a QLAC – Qualified Longevity Annuity Contract. This is a deferred annuity that does not begin payout to around age 85. Since the premium for purchase of the contract is excluded from the IRA account balance RMDs are reduced up to age 85, when the payout from the contract is considered to be part of the RMD. In short it defers taxable income until 85, and increases it after 85. There are some detailed and complex requirements outlined here: https://www.irs.gov/irb/2014-30_IRB/ar07.html