In previous posts we have discussed the unique characteristics of defined contribution plans (such as profit-sharing plans and 401(k) plans) and IRAs. We noted that a person is usually better off delaying distributions from a defined contribution plan or IRA as long as possible.
There are some situations where deferring distributions is not a good strategy. A few of those situations are described below. While there are other situations where deferral is not beneficial, the following exceptions warrant special attention.