Be Careful About Risks Under IRA Rollover Rule

Q.: I am 69 years old and do not plan to retire until I am in my late 70s. I have $250,000 in my New York City Employee IRA and $600,000 in my 457(b) account. As you know IRAs are subject to annual Required Minimum Distributions (RMDs) beginning at age 70.5, even for those of us that are still working. I do not need these mandatory withdrawals because I will have my paycheck. It is wrong to compel people like me into a higher tax bracket while still employed. Is there a way of postponing these mandatory withdrawals until such time as I stop working? P.J.

A.: I do agree, and you can postpone these RMDs. Using the direct rollover option, transfer, prior to attaining age 70.5, your NYCE IRA balance to a special 401(k) Rollover Account maintained by the Deferred Compensation 401(k) Plan of the City of New York. The 401(k) Plan allows people in your situation to defer the taking of RMDs until the year they retire. For you this will be in about 10 years. Do you have other IRAs? Now is an excellent time to transfer them to the special 401(k) rollover account.