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Two IRA's
Old 01-11-2013, 07:56 AM   #1
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Two IRA's

My wife and I both have an IRA with mind being much larger than hers. Does it matter how we withdraw from these accounts? I currently take 3-4% out of mine and leave hers alone or should I withdraw from both? My feeling is she will out live me and this keeps her nest egg in place for later years. She is currently 62 and I am 65.
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Old 01-11-2013, 08:10 AM   #2
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Not really, but your wife' account will need to start withdrawals at 70 and half.

"Since nothing the IRS does is ever simple, knowing when you need to start taking mandatory withdrawals, is but of course tricky. As you approach 70 1/2, you're faced with a choice. You can take your first minimum withdrawal during the year you turn 70 1/2, or you can take it by April 1 of the year after you turn 70 1/2. Then for each subsequent year, you must take at least the required minimum withdrawal by Dec. 31 of that year.
Why does it matter when you start tapping your IRA? Well, it can have significant tax implications. After all, if you don't take your initial minimum withdrawal during the year you turn 70 1/2, you must take two -- and pay the resulting double dip of taxes -- in the following year."
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Old 01-11-2013, 08:20 AM   #3
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You'd have to do some simulations to verify.......my first impression is that taking from yours might be better since you're closer to RMD age. Depleting yours first, would reduce your RMDs when you do start taking them and allowing hers to continue to build. Of course that means that her RMDs will then be larger than if you had withdrawn from hers so maybe it wouldn't matter in the end. Only the spreadsheet knows...............
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Old 01-11-2013, 10:30 AM   #4
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Originally Posted by kaneohe View Post
You'd have to do some simulations to verify.......my first impression is that taking from yours might be better since you're closer to RMD age. Depleting yours first, would reduce your RMDs when you do start taking them and allowing hers to continue to build. Of course that means that her RMDs will then be larger than if you had withdrawn from hers so maybe it wouldn't matter in the end. Only the spreadsheet knows...............
+1.

I'm 5 years older than DW. We have roughly equal IRA's/401k's. My RMD's come earlier and are always a larger percent of balance than DW's. I'm Roth converting from my IRA's first until they are depleted, and then converting and withdrawing from DW's. When we finally hit RMD's they may stay within the 15% tax bracket for us.
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Old 01-11-2013, 10:47 AM   #5
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+1.

I'm 5 years older than DW. We have roughly equal IRA's/401k's. My RMD's come earlier and are always a larger percent of balance than DW's. I'm Roth converting from my IRA's first until they are depleted, and then converting and withdrawing from DW's. When we finally hit RMD's they may stay within the 15% tax bracket for us.
+2 If you draw from your's first you will minimize RMDs - probably not a huge deal given you are reasonably close in age but a slight preference.
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