At age 70 1/2, your clients will start taking required minimum distributions from their 401(k)s and IRAs whether they need the money or not. A large majority of affluent savers don’t need that money to cover their expenses and are wondering what to do with it.

That’s according to the RMD Options study from Allianz Life Insurance Co. of North America, which finds that 88% of high-net-worth consumers ages 65 to 75 are familiar with RMD rules on tax-deferred retirement plans, and a full 80% of these respondents believe they will not need all of their RMDs for day-to-day living expenses.

As a result, they’re not sure what to do with the total amounts of these RMDs, and 32% are having a tough time understanding what they’ll do to their taxes in retirement.

This concern with taxes is a big deal, since 95% of respondents think it’s very important to reduce their taxes in retirement. In fact, 71% said they’re interested in using RMD payments to fund a financial product that could help offset the impact of taxes.

They also want a more efficient way to handle RMD payments, with 57% of respondents in the study saying they want the disbursement and tax payment to occur “without getting involved.”

Another dilemma is what to do with the leftover money after taxes, and some of their choices are age-dependent; half say they want to leave “a significant portion” of what they’ve set aside to beneficiaries, but 58% of older respondents — ages 71 to 75 — are even more likely to say they want to leave a legacy.

“Different age groups within the study have different priorities for their RMDs,” Paul Kelash, VP of Consumer Insights, Allianz Life, is quoted saying. “The 65–70 age group is most interested in tax-deferred growth of their RMD disbursements, and may feel unsure about how to best use RMDs. In contrast, the 71–75 age cohort, who have already started taking their payments, is realizing they don’t need the additional money and are looking to leave a legacy — either to leave to family or another beneficiary like a charity.”

While overall respondents want their RMDs to work toward their financial goals, whether legacy or something else, two-thirds want another way to use RMD payments to improve their financial situation. In addition, 79% wish they could use RMDs in a way that allows their portfolio to grow.

Allianz Life conducted an online survey of 805 respondents ages 65 to 75 with retirement savings of at least $500,000 if single or $750,000 if married.

In late August, President Donald Trump ordered the Treasury to review RMD rules. Rep. Richard Neal, D-Mass., who is likely to become chairman of the tax-writing Ways and Means Committee in January, has proposed exempting accounts with less than $250,000 from RMD requirements.

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