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Geezer FIREs alert!!!!!
Old 12-23-2008, 07:07 PM   #1
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Geezer FIREs alert!!!!!

I hear that the MRD (Minimum Required Distribution) rules for those reaching age 70 1/2 in 2009 have been suspended. I am trying to research this but it is good news for those in that category.
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Old 12-23-2008, 07:11 PM   #2
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Phew, I'm so relieved that "geezer" is used and doesn't apply to me yet.

Sounds like a good deal for those over 70-1/2.
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Old 12-23-2008, 07:12 PM   #3
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Is this what you're looking for?

Bush Pens RMD Bill into Law 12/23/2008

President George W. Bush on Tuesday signed into law a broad pension relief bill that includes a one-year moratorium on required minimum distribution (RMD) rules.
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Old 12-23-2008, 07:18 PM   #4
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REWahoo, thanks for that quick reply. I'm always impressed by those who have everything right at their fingertips!
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Old 12-23-2008, 07:21 PM   #5
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REWahoo, thanks for that quick reply. I'm always impressed by those who have everything right at their fingertips!
Don't thank me, thank Google News...
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Old 12-23-2008, 07:21 PM   #6
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Unfortunately, the RMD must still be taken in 2008 (people 70 1/2+ have till 31 Dec to take the distro). That's a hit, considering how much more IRAs and retirement accounts were worth as of 31 Dec 2007 (which the RMD is based on).

Our RMD is less than it might be, because, as the younger spouse, my life expectancy factors into the percentage; but it's still a hit.
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Old 12-23-2008, 09:57 PM   #7
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REWahoo, thanks for that quick reply. I'm always impressed by those who have everything right at their fingertips!
He's always happy to help his elder geezers!
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Old 12-23-2008, 10:01 PM   #8
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He's always happy to help his elder geezers!
And darned happy to know they're still with us...
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Old 12-23-2008, 10:17 PM   #9
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Definition of geezer.....An old person, especially an eccentric old man.

Looks like I'll never be one.....
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Old 12-23-2008, 10:18 PM   #10
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Definition of geezer.....An old person, especially an eccentric old man.

Looks like I'll never be one.....
geezer(ette)?
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Old 12-23-2008, 10:21 PM   #11
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geezer(ette)?
Ahh, ya got me!
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Old 12-23-2008, 10:38 PM   #12
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Definition of geezer.....An old person, especially an eccentric old man.
One of my friends and former HS classmates wrote in his 'profile' for a class reunion booklet back around 1990, that his ultimate goal in life was "to reach geezerdom"! He's getting closer to achieving his goal every day!
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Old 12-24-2008, 09:00 AM   #13
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[QUOTE=Amethyst;763509]Unfortunately, the RMD must still be taken in 2008 (people 70 1/2+ have till 31 Dec to take the distro). That's a hit, considering how much more IRAs and retirement accounts were worth as of 31 Dec 2007 (which the RMD is based on).

I still have a few years 'til RMDs. I haven't studied the subject thoroughly yet, but Amethyst makes me think of a strategy to consider. It would seem prudent to split IRAs and 401(k)s, etc. into "pots" of money which give flexibility for cashing out when RMDs will be due. In the case Amythyst mentions, it seems you could be forced to sell a relatively larger amount of your now less valuable stocks portfolio to satisfy RMDs. This situation would argue for keeping a significant portion of IRA (etc.) money in some sort of cash-like account. In years like this, you could use money from that account for RMDs. In years of good stock results, you could redeem stock accounts to refill cash acct. and/or pay RMDs to yourself.

I'm sure this is something you all have discussed before and have already figured out a strategy for. I'm late to the party, so I'm just now thinking it through for the near future. If I'm wrong, I'd prefer to find out now. Any thoughts on RMD strategy or can anyone direct me to an old thread? I'm still learning to use the search function - not always with the best of results!

RMDs sound like a real pain. Still, having to deal with RMDs would indicate that you have a chunk of assets. Guess that's the silver lining.
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Old 12-24-2008, 09:13 AM   #14
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RMD's are pretty simple. At least for us at PENFED. One of us had an RMD for 2008 and PENFED just took the money out of the SINGLE 6.25% CD the IRA was in WITHOUT disturbing the remaining value or interest rate of the CD and they calculated the amount for us (and got it right to the penny). With the new change applicable for 2009 we may just waive the 2009 withdrawal (have to read the details of the law - as I really do not trust the cogress as I am sure they complicated it in the details).
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Old 12-25-2008, 02:54 PM   #15
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Koolau, you're on the right track. My husband does have some of his retirement assets in a Vanguard money market fund. Every year, I calculate the amount of his RMD using the total amount of his various IRA and 401K assets, and the U.S. government's RMD calculator that accepts life expectancies (very important to do this right, to avoid IRS penalties).

Age differences between spouses can make a surprising difference in the RMD amount.

I then go onto husband's Vanguard web site, redeem the appropriate amount from his money market fund, and invest it into a mutual fund. Vanguard sends us an RMD statement to include with our tax return. Oh, and I also send a letter of notification every year to each of his other retirement "pots," to prevent them cutting an automatic RMD check to husband, calculated on his age alone, and thus higher than we are required to pay.

The RMD is simple, but...selling those $#@! stocks at a time like this is still a hit
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Old 12-25-2008, 03:06 PM   #16
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The RMD is simple, but...selling those $#@! stocks at a time like this is still a hit
My broker told me that when I start RMD I can take it in kind, thus averting the need to sell stocks.

Maybe this would also help you.

Ha
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Old 12-25-2008, 03:31 PM   #17
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My broker told me that when I start RMD I can take it in kind, thus averting the need to sell stocks.

Maybe this would also help you.

Ha
Interesting, not thought about that. I guess this means for example if you had a VG fund, say Total Stock index, in both an IRA and a taxable account you can simply transfer shares, paying taxes if necessary on the gains.
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Old 12-25-2008, 03:46 PM   #18
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Sorry, taking an RMD is a taxable event. Even if you transfer shares in kind, you owe taxes on the entire amount of the distribution you take. I cannot imagine why you would want the added complication of taking distributions in shares. I suppose it saves commission to repurchase the same position.
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Old 12-25-2008, 03:51 PM   #19
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Sorry, taking an RMD is a taxable event. Even if you transfer shares in kind, you owe taxes on the entire amount of the distribution you take. I cannot imagine why you would want the added complication of taking distributions in shares. I suppose it saves commission to repurchase the same position.
Seems logical enough but I suppose saving commission fees could be worth it, for those that pay commissions.
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Old 12-25-2008, 04:05 PM   #20
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Sorry, taking an RMD is a taxable event. Even if you transfer shares in kind, you owe taxes on the entire amount of the distribution you take. I cannot imagine why you would want the added complication of taking distributions in shares. I suppose it saves commission to repurchase the same position.
Thanks, but no sorry needed. I didn't say it avoided tax. The OP wasn't concerned about tax; she only said that it hurt to sell stocks when they were down.There is no complication; your basis is the same as the stock is valued when it is disbursed.

You save the spread, and the commission.

I'm not saying you should do it, but I plan to, unless I want to sell the stock anyway.

Ha
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