I created a short document to give you a few questions to ask before claiming your RMDs. Feel free to download it here. foundryfinancial.net/a-complete-guide-to-rmds
I started withdrawing when I turned 65 to try and avoid having 85% of my Social Security subject to tax. I take out about 5% each year. I try and keep income like interest, my IRA withdrawal plus 1/2 my SS to keep the total under $32k. I still have the half of the amount over 25k subject to tax.
I turn 73 in October. Earlier this year I withdrew enough to satisfy RMD requirements. But this was before I turned 73. Do I have to take another RMD this year? If I take it before April of next year will I need to take another one before end of year? I am definitely confused. Thank you.
@AlannahPere Thank you for your reply. Yes I did withdraw the required amount. But I was 72 when I withdrew it. So I turn 73 this week. My question is do I have to withdraw another rmd this year or before April of next year? And will I have to take another one before the end of year? I turned 72 during the rule change from 72 to 73. Makes my situation confusing.
Great video. I inherited a non-spousal IRA in 2019 and am self employed. Worked out an interesting strategy to "convert" that into a Roth IRA via an Individual 401K account under my business. I take a distribution equal to the 401K contribution limits. Then I use that to make a pre-tax 401K contribution. At the end of the year, I do a Roth conversion on the individual 401K balance. In the end, I pay taxes twice on that money, but get one deduction, so it balances out. I have 1 more year to finish moving that inherited IRA into the Roth account. This only works if you have self employed income and the individual 401K account had some limitations as I recall, so not a strategy for most folks. I wanted to clear out that inherited account since it's more complicated to deal with and moving it to a Roth is a plus. I also have a traditional IRA and have been doing Roth conversions for the last 6 years or so to get that balance down.
OMG!!! LOL, I’ve spent so much time saving and praying my account grew and knew the RMD existed, but never imagined it would be so large if you’ve got a big nest egg. I’ll be contacting a financial planner soon, though I’m only 64 and I’ve already been pulling from it. (Should everyone have such problems 😉)
@@xxxx-tb4de exactly. Everything you need to know can be found on the internet. I have more money than most financial planners so why would I ask them their opinion on money.
Yes, I regret not converting my IRA asset to Roth IRA. Every year before one hit 73, convert to Roth IRA and reduce RMD amount at 73. Once you start RMD, you won't be able to convert to ROTH. You can but taxes will be high due to RMD. Now I am 83 and RMD amount is getting bigger as life expectancy is less. But as my father told me once that it is nice to have these kind of problems.
I'm in the same boat and figured out the RMD tax bomb a few years ago. Am making plans now to spend down+Roth convert pretax retirement money so RMDs won't be outrageously high and I won't get pushed into high tax brackets and over the IRMAA cliff.
All the strategies sound great if used in preplanning. Is their another tax free vehicle to put a RMD proceeds into to avoid the tax liability or are you going to have to pay the taxes? And then invest in some vehicle? I understood about the vehicles you mentioned.
Might have missed this, but think it still works to convert, even if you pay for conversion by taking a larger withdrawal. Would like your comment. Also, recognizing taxes will climb on 401k withdrawals for surviving spouses after a death. Seems like a reason to convert sooner.
Sorry about the second question however, what do you think about my plan is to take my RMD and instruct let’s say Fidelity to take the taxes out of my account. Thank you.
Could you address the inherited IRA RMD for a disabled person? I have an adult child who is chronically ill, and on SSDI. What are the RMD requirements when she inherits my IRA? Thanks.
By far the best video I have found on RMD's but, I'm still confused. I'm 58 and inherited money last year from my 60 year old sister that passed. I was told about the 10 year rule but, just recently heard about the RMD along with changes made to it in 2024. I really don't want to start taking money out now and would prefer to let it grow until I'm ready for retirement which I'm planning for 62. So, I guess my question is do I need to take an RMD now or can I wait? My impression is that if I start taking an RMD now I'm locked in and can't change in the following years. I would really appreciate your insight.
Thanks, John! I don’t know your specifics, so this isn’t advice - but if your sister hadn’t started taking her RMDs you have ten years to withdraw from when you inherited. You can take some now if you want or wait.
You first RMD depends on your year of birth. It could be as late as 75. A financial firm may estimate your RMD on your statements and/or their website but is unlikely anyone would contact you directly unless you have an advisor.
You have to do a direct transfer from the ira to the organization. You can't touch the money. That amount is considered as part or all of your RMD. I can't answer the second question, since I have my CPA do my taxes.
You can take it any time in the year you turn 73. You don't have to wait until your birthday as long as it is in the same year. Your rmd will be figured on the amount you had in your acct on Dec 31, 2023.
Your gonna have to take it every year from now on. For the first year you can delay it to April 1 of next year but you'll have to take the other one also and have to pay taxes on both of them for that year. Recommend you take it right now if you need the money. Regardless if you don't take it at all the IRS will do it for you and you'll be paying 50% tax on the withdrawal rather than what it would have been, like 22 to 28 %. Don't let them do that to you. Just be sure to take it before Dec 31 to keep your tax bracket lower. That's just how it is.
So for your first rmd look up what the account was on Dec31, 2023. Take that number and divide it by 26.5. The result is your rmd. You'll pay taxes on it when you fill out your 1040 for 2024. You can ask them to withhold some money for taxes. I saw my advisor today. I'm in the same boat. She recommended they withhold 15% for federal tax and 5% for state tax. If you live in Nevada, lucky you. No state income tax there.
I'm taking mine November 1. I turned 73 in May this year. My 401k with my state retirement told me that they are sending me a check for my end on Nov 30. They figured it all out. No effort on my part. My other end is from investments I made with Charles Schwab. They don't automatically do it. It's on me to fill out the forms and make the withdrawal. So my financial advisor did that for me today. I can get the money anytime but I said let's make it in November so I have two checks just in time for Christmas.
RMD's aren't a burden. You $3 or $4 and end up giving $1 back to the government. You can spend what remains. People may not like it (paying taxes), but no one is going to feel sorry for you. You aren't a victim. All you can do is shift the timing somewhat and maybe lower the rate somewhat.. Do it as much as you can. But the money was ALWAYS going to get taxed at some point if you want to use it.
RMD age 73 for most folks? I’m retired and age 63, and I believe my RMD age will be age 75. Anyone younger than me would also have a RMD age of 75, no? That’s a lot to cover in 15 minutes!
I created a short document to give you a few questions to ask before claiming your RMDs. Feel free to download it here. foundryfinancial.net/a-complete-guide-to-rmds
Thank you for this content. Much appreciated and now subscribed to keep learning.
Thanks, John!
I started withdrawing when I turned 65 to try and avoid having 85% of my Social Security subject to tax. I take out about 5% each year. I try and keep income like interest, my IRA withdrawal plus 1/2 my SS to keep the total under $32k. I still have the half of the amount over 25k subject to tax.
Soooo glad I went with a Roth.
I turn 73 in October. Earlier this year I withdrew enough to satisfy RMD requirements. But this was before I turned 73. Do I have to take another RMD this year? If I take it before April of next year will I need to take another one before end of year? I am definitely confused. Thank you.
25k a week? Amazing! how did you get started?
Honestly I really need help learning to trade. Seeing my portfolio low makes me very sad.
@GeldaRibeiro who is Dave, if you dont mind me asking?
@GeldaRibeiro Thank you for this. I GOOGLED him, He seems very proficient and flexible. I booked a session with him.
@AlannahPere Thank you for your reply. Yes I did withdraw the required amount. But I was 72 when I withdrew it. So I turn 73 this week. My question is do I have to withdraw another rmd this year or before April of next year? And will I have to take another one before the end of year? I turned 72 during the rule change from 72 to 73. Makes my situation confusing.
Good content on an important topic to me, just subscribed! Thanks
Thanks, Julie!
He might have mentioned this but I believe if you wait until the next year to take the first RMD, you’ll end up with two RMDs that year.
That is correct.
Great video. I inherited a non-spousal IRA in 2019 and am self employed. Worked out an interesting strategy to "convert" that into a Roth IRA via an Individual 401K account under my business. I take a distribution equal to the 401K contribution limits. Then I use that to make a pre-tax 401K contribution. At the end of the year, I do a Roth conversion on the individual 401K balance. In the end, I pay taxes twice on that money, but get one deduction, so it balances out. I have 1 more year to finish moving that inherited IRA into the Roth account. This only works if you have self employed income and the individual 401K account had some limitations as I recall, so not a strategy for most folks.
I wanted to clear out that inherited account since it's more complicated to deal with and moving it to a Roth is a plus. I also have a traditional IRA and have been doing Roth conversions for the last 6 years or so to get that balance down.
Thanks!
My experience says most brokerages will figure your RMD and pay the necessary amounts to the feds for you! 😊
That is how mine works.
OMG!!! LOL, I’ve spent so much time saving and praying my account grew and knew the RMD existed, but never imagined it would be so large if you’ve got a big nest egg. I’ll be contacting a financial planner soon, though I’m only 64 and I’ve already been pulling from it.
(Should everyone have such problems 😉)
Pull from it but NEVER contact a financial planner.
@@xxxx-tb4de exactly. Everything you need to know can be found on the internet. I have more money than most financial planners so why would I ask them their opinion on money.
Yes, I regret not converting my IRA asset to Roth IRA. Every year before one hit 73, convert to Roth IRA and reduce RMD amount at 73. Once you start RMD, you won't be able to convert to ROTH. You can but taxes will be high due to RMD. Now I am 83 and RMD amount is getting bigger as life expectancy is less. But as my father told me once that it is nice to have these kind of problems.
I'm in the same boat and figured out the RMD tax bomb a few years ago. Am making plans now to spend down+Roth convert pretax retirement money so RMDs won't be outrageously high and I won't get pushed into high tax brackets and over the IRMAA cliff.
Great presentation. Now i have to plan it out. Thank you.🙏
Great video, I signed up for the RightCapital software. Unfortunately, it has many features missing, such as the Tax and Retirement tabs.
Thanks, it takes 24 hours to get access after the account is created.
thanks for the clarification @@foundryfinancial
All the strategies sound great if used in preplanning. Is their another tax free vehicle to put a RMD proceeds into to avoid the tax liability or are you going to have to pay the taxes? And then invest in some vehicle?
I understood about the vehicles you mentioned.
Might have missed this, but think it still works to convert, even if you pay for conversion by taking a larger withdrawal. Would like your comment.
Also, recognizing taxes will climb on 401k withdrawals for surviving spouses after a death. Seems like a reason to convert sooner.
Yeah, you could definitely pay by taking a larger withdrawal.
I never saw the point of eliminating the stretch rule. That's just government greed.
The point is the IRS wants their tax money……..there is no escaping the tax man 😊
415 Leannon Ridges
It seems a good FA or investment house will help you with your RMD's
They won’t with inherited IRAs, which are the trickiest. I mean custodians - advisors will.
Morgan Stanley tells me what the RMD is for my inherited IRA every year. No worries.
Sorry about the second question however, what do you think about my plan is to take my RMD and instruct let’s say Fidelity to take the taxes out of my account. Thank you.
When I take out the RMD can I tell that let’s say Fidelity which fund I want the money taken out of?
Can you do an RMD and Roth conversion at the same time for the same money?
Should I begin withdrawalin RMD at age 68 without IRS penalties?
Could you address the inherited IRA RMD for a disabled person? I have an adult child who is chronically ill, and on SSDI. What are the RMD requirements when she inherits my IRA?
Thanks.
By far the best video I have found on RMD's but, I'm still confused. I'm 58 and inherited money last year from my 60 year old sister that passed. I was told about the 10 year rule but, just recently heard about the RMD along with changes made to it in 2024. I really don't want to start taking money out now and would prefer to let it grow until I'm ready for retirement which I'm planning for 62. So, I guess my question is do I need to take an RMD now or can I wait? My impression is that if I start taking an RMD now I'm locked in and can't change in the following years. I would really appreciate your insight.
Thanks, John! I don’t know your specifics, so this isn’t advice - but if your sister hadn’t started taking her RMDs you have ten years to withdraw from when you inherited. You can take some now if you want or wait.
Thank you very much for the info and the quick response.@@foundryfinancial
Will anyone remind me when it comes to the year I'm required to start RMD? Will the financial houses where I have my IRA accounts remind me?
My father told me the place he has his investments send him the amount RMD every year. But why don’t you call them or send email to ask?
Morgan Stanley tells me about mine, so yours probably will too.
And you could set up a reminder on your phone or PC for your 73rd birthday too.
Yes, They should. Fidelity, Vanguard, Charles Schwab - All will remind you.
You first RMD depends on your year of birth. It could be as late as 75. A financial firm may estimate your RMD on your statements and/or their website but is unlikely anyone would contact you directly unless you have an advisor.
What is the procedure of giving money to charitable organizations for RMD money? How do I report it in my IRS tax forms?
You have to do a direct transfer from the ira to the organization. You can't touch the money. That amount is considered as part or all of your RMD. I can't answer the second question, since I have my CPA do my taxes.
QCD - Qualified Contribution Deduction.
Generally, is it better to take your first RMD in the year you turn 73 or wait until the following year prior to April 1?
If you wait until April 1, then you will have to take out 2 RMDs that year. The April 1 deadline only applies in the first year.
Take it as early as possible.
Rupert Light
RMDs will wreak havoc on your Social Security Benefit
We turn 73 in december...does that mean the following December we need to take again?
You can take it any time in the year you turn 73. You don't have to wait until your birthday as long as it is in the same year. Your rmd will be figured on the amount you had in your acct on Dec 31, 2023.
Your gonna have to take it every year from now on. For the first year you can delay it to April 1 of next year but you'll have to take the other one also and have to pay taxes on both of them for that year. Recommend you take it right now if you need the money. Regardless if you don't take it at all the IRS will do it for you and you'll be paying 50% tax on the withdrawal rather than what it would have been, like 22 to 28 %. Don't let them do that to you. Just be sure to take it before Dec 31 to keep your tax bracket lower. That's just how it is.
So for your first rmd look up what the account was on Dec31, 2023. Take that number and divide it by 26.5. The result is your rmd. You'll pay taxes on it when you fill out your 1040 for 2024. You can ask them to withhold some money for taxes. I saw my advisor today. I'm in the same boat. She recommended they withhold 15% for federal tax and 5% for state tax. If you live in Nevada, lucky you. No state income tax there.
I'm taking mine November 1. I turned 73 in May this year. My 401k with my state retirement told me that they are sending me a check for my end on Nov 30. They figured it all out. No effort on my part. My other end is from investments I made with Charles Schwab. They don't automatically do it. It's on me to fill out the forms and make the withdrawal. So my financial advisor did that for me today. I can get the money anytime but I said let's make it in November so I have two checks just in time for Christmas.
RMD's aren't a burden. You $3 or $4 and end up giving $1 back to the government. You can spend what remains.
People may not like it (paying taxes), but no one is going to feel sorry for you. You aren't a victim.
All you can do is shift the timing somewhat and maybe lower the rate somewhat.. Do it as much as you can.
But the money was ALWAYS going to get taxed at some point if you want to use it.
ROUTH BABBY! ROUTH AND ROUTH 401k! No TAX BABBY!
@@jeannettesilva4242 You meant ROTH ?
RMD age 73 for most folks? I’m retired and age 63, and I believe my RMD age will be age 75.
Anyone younger than me would also have a RMD age of 75, no?
That’s a lot to cover in 15 minutes!
Actually, you’re right on the RMD age - lots of people watching will have until 75.
Take the RMD........Ukraine needs those tax dollars!!
When I take out the RMD can I tell that let’s say Fidelity which fund I want the money taken out of?