Managing IRA RMDs with QCDs, Roth Conversions, and QLACs

August 7, 2019

Clients can gift required minimum distributions (RMDs) to charity via a qualified charitable distribution (QCD) and convert an equivalent amount (or less) to a Roth IRA. Is it possible to supersize that strategy?

In my post on June 7 titled Managing IRA RMDs with QCDs and Roth Conversions, I identified two strategies: Gift required minimum distributions (RMDs) to charity via a qualified charitable distribution (QCD) and convert an equivalent amount (or less) to a Roth IRA as a “tax neutral” play to manage traditional IRA payments that are neither wanted nor needed. I then started thinking . . . could it be possible to supersize the strategy?


Supersizing the Strategy

Qualified longevity annuity contracts (QLACs) may augment the strategy positioned in the previous post. A QLAC may allow an IRA owner to:

  • Create periodic income for the IRA owner (and possibly spouse) later in life to hedge against  longevity risk.
  • Better manage tax liabilities by delaying RMDs from a portion of IRA retirement assets. (Funds
    used to purchase the QLAC are backed out of the IRA’s value for purposes of determing future RMDs. A lower IRA account value translates to smaller RMDs.)
  • Cover unexpected expenses, such as healthcare costs, that may increase during the later years of retirement.
  • Supplement possible reductions in income due to the death of a spouse (for example, loss of pension or Social Security benefits).

When future QLAC payments begin, they serve as the RMDs for the funds in the IRA QLAC. Lastly, if the IRA QLAC owner is truly charitably inclined, he/she may even name a charity as the primary or contingent beneficiary of the QLAC to receive the return-of-premium death benefit (if offered).



Forced RMD payments from traditional IRAs may present tax and other headaches for IRA owners. Folks who neither need nor want these RMD payments are looking for planning ideas to satisfy the requirements while accomplishing other planning goals. Charitable gifting of RMDs, later-life income through QLACs, and legacy planning using Roth IRAs may fit one or more of these goals.  

For additional information about QCDs, RMDs, Roth IRA conversions, and QLACs, please contact the Retirement Strategies Group at (800) 722-2333, extension 3939, or email us at


Picture of James B. Schomburg

Jim is a Senior Retirement Strategies Group Consultant with more than 20 years of industry experience. Prior to his current position, he worked as an advanced marketing attorney for other insurance and wealth-management firms. He began his financial services career in the private practice of law, focusing on estate planning and administration as well as family and real estate law.

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