The income from required minimum distributions (RMDs) is your reward for having diligently funded your retirement accounts. But the no-free-lunch principle applies: RMDs are taxable. In addition, because they reduce the value of your retirement accounts, you’ll have less to draw on in future years, especially if you have a long lifespan.
You must start taking RMDs from your IRA, 401(k) plan or other qualified retirement plan when you reach age 73. The only good way to defer some of them is to transfer a portion of your retirement plan assets to a qualified longevity annuity contract (QLAC). The money in a QLAC is excluded from plan assets on which RMDs are calculated.
