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Sometimes it takes a 2x4 upside the head for the obvious to
sink in.
The other day while studying the tax effects of converting
a Traditional IRA to a ROTH, it dawned on me that the
advise of using after-tax money to pay the tax due on
the ROTH conversion ALSO APPLIES TO PAYING THE TAX
ON RMDs. Talk about a "duh" moment.
Since this is an early retiree board, most of you have not
entered the RMD phase (except maybe Jarhead), but please
pass this tip on to your parents:
Don't let the financial institution withhold tax. Pay the tax
out of savings, if possible. This will help your IRA live longer.
Cheers,
Charlie
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