South Florida RMD Strategy: Annuity With Death Benefit

How South Florida Retirees Are Using Annuities to Reduce Taxes and Leave a Legacy

Many retirees in South Florida find themselves in a common situation: they’ve done a great job saving over the years and now hold a mix of retirement accounts—401(k)s, Roth IRAs, Traditional IRSs, individual brokerage accounts, Social Security, possibly a pension. But with retirement comes a new kind of challenge, and that's withdrawing income without creating a tax storm.

It’s a balancing act. Every dollar withdrawn from a 401(k) or qualified account is fully taxable. Capital gains from brokerage accounts are taxed. And yes, even Social Security can be taxed depending on your income. For those who’ve worked hard to build up their savings, paying unnecessary taxes and risking their legacy is the last thing they want to do.

The RMD Problem: Why Deferring Withdrawals Isn’t Enough

Many retirees choose to delay taking money from their 401(k) or qualified accounts as long as possible. That strategy works until age 73, when the IRS steps in and forces required minimum distributions (RMDs). Once that happens, whether you need the money or not, you’re forced to withdraw a portion and pay taxes on it.

Let’s say you follow the strategy of "only take the RMD" to minimize your taxable income. That leaves three possible outcomes for your qualified accounts and what is left behind to heirs:

• Your account balance remains flat in a given year because you earned a return in the market that is equal to the RMD withdrawal.

• The account grows in a given year because you earned a return in the market that is greater than the RMD withdrawal.

• Your account losses value due to negative market returns in combination with the RMD withdrawal.

In any case, there’s no guarantee of what your heirs will receive. Whatever balance remains is what gets passed on, if anything.

What If You Could Take RMDs and Guarantee a Legacy?

This is where many South Florida retirees are turning to fixed index annuities with enhanced death benefits. These products offer a way to satisfy IRS withdrawal requirements, avoid market losses, and lock in a guaranteed death benefit for beneficiaries. All this accomplished with a simple roll over from one account to another. No tax implications. No Penalties. And the enhanced death benefit is available to anyone with any health condition, approval is needed.

Let’s walk through a real-world example.

A Tax-Smart Legacy Plan Using a Guaranteed Death Benefit Annuity

Imagine a 72-year-old South Florida retiree rolls over $500,000 from his 401(k) into a fixed index annuity with an enhanced death benefit. He’s looking to meet his RMDs, limit taxable income, and pass money on to his family with certainty.

According to a hypothetical illustration that showcases the guaranteed values, this is what happens over 20 years:

• From age 73 to 92, he receives $410,527 in total RMD withdrawals.

• At age 92, even after all those withdrawals, there’s a guaranteed death benefit of $470,870.

• This all assumes minimal interest growth after the first year.

Let that sink in:
He deposited $500,000, withdrew $410,000+ over time, and still left behind nearly $471,000.

Why This Strategy Works for South Florida Retirees

The retiree in this example took a 401(k) account with no death benefit, no downside protection, and unpredictable returns and turned it into a plan that checks every box:

• Meets RMD obligations

• No exposure to market downturns

• Exposure to growth

• Guarantees a death benefit for loved ones

And he didn’t have to roll the dice on the market or apply for life insurance to accomplish this.

For retirees in South Florida where wealth preservation and tax planning are top of mind this strategy offers a powerful combination of stability, predictability, and control.

Final Thoughts: Turning Retirement Savings Into a Family Legacy

You’ve spent decades building your nest egg. Now it’s time to make it work smarter. With the right annuity strategy, you don’t have to choose between taking income and leaving a legacy, you can do both.

If you're in South Florida and want to see how this might work with your retirement accounts, we can walk through a custom scenario based on your personal goals.

Want to see how much income and guaranteed legacy you could create from your 401(k)?
Schedule a free retirement income analysis today.