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RMD Folks how are you using the money
Old 06-26-2018, 12:33 PM   #1
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RMD Folks how are you using the money

I have some years left before I'm required to take MRD. My question is to you folks that are getting them now are you reinvesting, spending it and what have you been doing with these large sums of money?
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Old 06-26-2018, 12:38 PM   #2
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The RMD amounts to about a third of our withdrawal for the year, so it just gets spent.
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Old 06-26-2018, 12:53 PM   #3
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I'm still a ways off from my own RMD, at 70.5, as I'm only 48. I might start tapping those funds a little early though, once the time gets closer, if it might be tax advantageous to do so.

However, I have two inherited IRAs...the first from my grandmother, who passed away in 2015, and the second from my Dad, who passed away in 2017. So far, the withdrawals have been small. I think for Grandmom's, it was around $126 in 2016, $88 in 2017, and $117 in 2018. It's in a somewhat aggressive/volatile fund, and only started off with around $4800, so that's why it's fluctuated so much. I've just been depositing these into my checking account and they get spent, invested, or whatever with the rest of that money.

The second IRA, from my Dad, was a bit more sizeable, around $66K. The first RMD was around $1800 this year. I didn't need it, so I put it in a money market account that I'm currently using, to save up for the down payment on a house. I think the APR on it is about 1.66% annually. I figured I'd keep this conservative, since I might need the money in a few years.
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Old 06-26-2018, 01:07 PM   #4
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We are not yet requited to take RMD's, but to lessen the tax torpedo effect of RMD + SS + regular divs/capital gains.
We are taking some $$$ from IRA while we are low income.
Some IRA we directly convert to ROTH, and some is simply withdrawn.
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Old 06-26-2018, 01:17 PM   #5
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My wife has a beneficiary IRA and the RMDs are used for our expenses. However, in our minds, we assume they are utilized for travel. When our other IRAs have RMDs, we’ll likely have excess income that will be transferred to a taxable account, which if my projections are correct, will become our biggest asset account.
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Old 06-26-2018, 01:30 PM   #6
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We aren't taking RMDs yet but when we start my plan has to reinvest the distributions and DH's plan is to buy a Lexus, but that is a ways off so for us so we can decide at the time.
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Old 06-26-2018, 01:31 PM   #7
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Quote:
Originally Posted by Sunset View Post
We are not yet requited to take RMD's, but to lessen the tax torpedo effect of RMD + SS + regular divs/capital gains.
We are taking some $$$ from IRA while we are low income.
Some IRA we directly convert to ROTH, and some is simply withdrawn.
You could contribute to a 529 of someone you know and take a tax deduction.

You can gift to family.

My question is, what would you want to do with it. Spend, or re-invest?
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Old 06-26-2018, 02:01 PM   #8
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Our current plan for RMDs is to have ETF shares transferred in kind to our brokerage account, so we will be “reinvesting.”

We may withhold part of the RMDs for paying taxes, too.
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Old 06-26-2018, 02:05 PM   #9
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I have 5 years to go but, assuming that it's still permissible, an amount equal to my church pledge will be donated directly, thus keeping that amount out of my AGI. While it's true that I'll no longer be able to deduct that donation and thus won't be able to itemize, the standard deduction will mitigate a lot of that loss.

A lot can change with the tax laws in 5 years, of course.
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Old 06-26-2018, 02:05 PM   #10
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Should probably change the title, I am only in here cause I thought it was about MARRIED folks.
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RMD Folk's how are you using the money
Old 06-26-2018, 02:06 PM   #11
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RMD Folk's how are you using the money

2017 was the first year for an RMD from my inherited IRA. It was around $2500 and I used it to replace our 26 year old manual Sunsetter Awning with a new motorized one. Itís wonderful! My dad always loved our deck and awning and I think of him often when I press the button on the remote.

This year the RMD is around $2750 (yay for growth!). So far no specific plans for the money.
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Old 06-26-2018, 02:10 PM   #12
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We are into our second year of RMDs and the amounts are roughly equal to what we were already withdrawing. So to answer your question, we are spending it.
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Old 06-26-2018, 02:18 PM   #13
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Quote:
Originally Posted by daylatedollarshort View Post
my plan is to reinvest the distributions and DH's plan is to buy a Lexus,
A Lexus isn't an investment?
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Old 06-26-2018, 02:23 PM   #14
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We draw $4000/mo as "salary", use QCDs twice a year for charitable giving, and this year the rest was spent towards a new vehicle.
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Old 06-26-2018, 02:25 PM   #15
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Currently only drawing on an inherited IRA. RMDs are ~$4,000 which I just have transferred into the taxable account. My plan, by the time we reach 70, (which starts in 4 years) is to continue to have the RMDs transferred into the taxable account. Between pension and SS we should have enough to cover all expenses, unless we get crazy wild. But it will be there if we need it.
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Old 06-26-2018, 02:59 PM   #16
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Inherited RMD with a fairly small distribution, on the order of a few thousand dollars. I consider the money fungible, and it gets thrown in with everything else in the taxable account at rebalancing time. That, and I have a non-qualified inherited annuity from which I'm taking withdrawals over a five year period to minimize the tax hit.
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Old 06-26-2018, 03:15 PM   #17
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Quote:
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A Lexus isn't an investment?

I'm not a Lexus fan but you just never know.

https://www.usatoday.com/story/money...ars/535553002/
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Old 06-26-2018, 03:28 PM   #18
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I reinvest part of it back into the same fund but in our joint account (usually TSM). Another part goes into PMMF to blow on top shelf liquor and craft beer throughout the year.
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Old 06-26-2018, 03:29 PM   #19
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Projecting the account balance, guessing that my RMD with be somewhat larger (or more) than my current WD. Not a huge amount so maybe I'll pull a little more for the next few years. I plan to run the taxes with the current assumptions plus a healthy dose of future increases to justify my actions.
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Old 06-26-2018, 03:33 PM   #20
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A Lexus isn't an investment?
DW's 13 year old Lexus is slowly turning from a whim into a solid wise expense choice. Making the leap to an investment would require some extraordinary circumstances.
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