Born March 1952 When to take RMD?

[target2019]

Quite possibly, yes.
In my case, I have pension/annuity income hitting my checking account on the first, so I stagger my RMD income by a couple weeks.
YMMV, as someone once said...

Thanks. I was thinking that was your reason. For me a week #2 check would make sense. Or maybe quarterly.

 

[audreyh1]

I would just do once for the year for simplicity.

+1

I’m not taking RMDs yet, but I would prefer annually, maybe later in the year. I’ll do QCDs first.

And I will also start the year I turn 73.

 

[Car-Guy]

I would just do once for the year for simplicity.

I would too except I have both an IRA and 401k. Since I must withdraw RMD's from those separately, I'm not necessarily going to try to do them at the same time. I'll probably hit the IRA in January and the 401K later in the year.

 

[target2019]

Looks like there are several options to schedule an RMD. I have time to figure that out (I hope), and also QCD.

 

[donheff]

I think the year to start gets confused with tables like the one posted about that identify the year by the 4/1 last date RMD can be taken. Most, or at least many, people will not want to take 2 RMDs in the first year because of the tax consequences. Better to make it clear that and RMD calculation and obligation begins on the year the become 73, but for the first only can be paid in the beginning of the following year.

I also don't get the idea that since the money is taxed like income you should withdraw it like income (e.g. monthly or biweekly, or whatever). Since the choice is wide open, the decision is up to you to meet whatever objectives you want. Target has the right table for that. What the heck, you could even break it up and withdraw an all cash to you portion on Jan 1, and an all-tax withheld portion on 12/31.

 

[audreyh1]

Right, to me it's just a transfer from tax-deferred investment funds to taxable investment funds. I might even transfer some assets in kind.

We already do annual spending withdrawal in Jan based on entire retirement portfolio value on Dec 31. The withdrawal is made from taxable accounts. At that point the RMD from the prior year will already be part of the taxable accounts, so not distinguishable, as it should be because it won't matter.

 

[cathy63]

+1

I’m not taking RMDs yet, but I would prefer annually, maybe later in the year. I’ll do QCDs first.

And I will also start the year I turn 73.

If you do QCDs, those can count as your RMD, so if you donate enough early in the year you may not even have to take anything later in the year.

 

[audreyh1]

If you do QCDs, those can count as your RMD, so if you donate enough early in the year you may not even have to take anything later in the year.

Right, I was including QCDs as part of my RMD.

 

[rk911]

Do you NEED the income? If not then consider donating your tIRA RMD to charity through a Qualified Charitable Donation (QCD). The advantage is the RMD never hits the the 1040 as income.

 

[jazz4cash]

I imagine there are various situations that taking your 1st RMD in the following year is beneficial but I see it more as a grace period for transitioning to mandatoey distributions. I like how Fidelity prominently tells me my RMDs start for the year I turn 73 even though I am years away. The deadline details require drilling down. OTOH Fido says they are ‘revamping’ the RMD info into an ‘RMD Hub’. It seems like they always revamping something.

 

[CRLLS]

As mentioned above, you (and I) must make an RMD for year 2025. That RMD can be made in 2025 or as late as April 1, 2026. However, you will also have an RMD for year 2026, which must be made no later than December 31,2026.

The RMD for 2025 will be based on the end of 2024 IRA balance. The 2026 RMD will be based on the end of 2025 IRA balance. The divisor/multiplier for each year will be different, based on the IRS life expectancy chart.

 

[marko]

As mentioned above, you (and I) must make an RMD for year 2025. That RMD can be made in 2025 or as late as April 1, 2026. However, you will also have an RMD for year 2026, which must be made no later than December 31,2026.

The RMD for 2025 will be based on the end of 2024 IRA balance. The 2026 RMD will be based on the end of 2025 IRA balance. The divisor/multiplier for each year will be different, based on the IRS life expectancy chart.

This is helpful. I was also born in 1952.

Question:
How does the IRS know that whatever I withdraw is for the RMD or do they just look at total withdrawals? Is there some box that needs checking?

My current annual withdrawals exceed any RMD but I withdraw $X monthly. I'm assuming that as long as my twelve month total more than my RMD I should be ok.

 

[audreyh1]

This is helpful. I was also born in 1952.

Question:
How does the IRS know that whatever I withdraw is for the RMD or do they just look at total withdrawals? Is there some box that needs checking?

My current annual withdrawals exceed any RMD but I withdraw $X monthly. I'm assuming that as long as my twelve month total more than my RMD I should be ok.

The IRS assumes that what you initially draw goes towards satisfying your RMD. It’s called the first dollar out rule.

In your case it doesn’t matter and as long as the total for the year meets or exceeds your RMD you’re good.

 

[CRLLS]

Audreyh1 is correct AFAIK. Every dollar withdrawn is "considered" part of the RMD, up to the minimum RMD amount.

Just be aware that the RMD amount becomes a noticeably larger percentage each year. At some time, if you aren't paying attention to the RMD amount each year, you could end up not withdrawing enough. In addition, if you are do real well in the market on year, the next year's RMD grows proportionally. The bottom line is to do the calculations each year.

Both of our tIRAs are in Fidelity and they do that calculation for me. DW and I file MFJ. I don't know if what Fido will show on my account is for just me, or for us both. I'll deal with that in 2025. I've got enough on my mind before then, and things could easily change as they have over the last couple of years.

 

[frayne]

Just be aware that the RMD amount becomes a noticeably larger percentage each year. At some time, if you aren't paying attention to the RMD amount each year, you could end up not withdrawing enough. In addition, if you are do real well in the market on year, the next year's RMD grows proportionally. The bottom line is to do the calculations each year.

This is an excellent point and it should also be noted that as your RMD increases, the amount of your social security that is taxed may be increased as well, depending on your combined income.

 

[marko]

As mentioned above, you (and I) must make an RMD for year 2025. That RMD can be made in 2025 or as late as April 1, 2026. However, you will also have an RMD for year 2026, which must be made no later than December 31,2026.

The RMD for 2025 will be based on the end of 2024 IRA balance. The 2026 RMD will be based on the end of 2025 IRA balance. The divisor/multiplier for each year will be different, based on the IRS life expectancy chart.

The IRS assumes that what you initially draw goes towards satisfying your RMD. It’s called the first dollar out rule.

In your case it doesn’t matter and as long as the total for the year meets or exceeds your RMD you’re good.

This is an excellent point and it should also be noted that as your RMD increases, the amount of your social security that is taxed may be increased as well, depending on your combined income.

"Today I learned...."

As always, this forum is incredible.

 

[Midpack]

"Today I learned...."

As always, this forum is incredible.

+1. Agreed. I probably shouldn't have posted, just listened...

 

[Kwirk]

I like to keep things simple for my heirs so I do my entire RMD very early in January. I put a note on my tax folder for the year saying that the RMD has been completed (with the amount).

If I die during the year it's one less thing for them to worry about.

 

[kgtest]

Essentially the same as above. But as others have said, you can start 12/31 in the year you turn 73/75 to avoid a "double whammy" in the next year paying 4/1 AND 12/31. Will be by 12/31 thereafter regardless.

I like the "double whammy" tax torpedo analogy. By waiting...or ehem...procrastinating, you will get a double-whammy uncle sammy samie! I just coined that one by the way. The Uncle Sammy sammie!

When someone delays the first RMD to April, after their bday year but then also has to take THAT year's RMD for that double-whammy trigger.

 

[kgtest]

This is an excellent point and it should also be noted that as your RMD increases, the amount of your social security that is taxed may be increased as well, depending on your combined income.

THE TRIPLE WHAMMY UNCLY SAMMY SAMMIE! OUCH!

This WOULD be the case of my DF who turned 72 in October, 2023. So he will just take all of his RMD beginning of the year, based on his ending IRA/401k balances THIS year / 27.4 RMD Life Expectancy factor.

SOoo, if dad has say a $1MM IRA+401k EOY balance this year,

1,000,000 / 27.4 = $36,496.35 out before the end of 2024. he COULD wait until April, of 2025 BUT...that would be 36,500 PLUS what his 2024 RMD would be which would be likely another 35-40k.

My as well rip the band-aid off and take it right away.

 

[Car-Guy]

When someone delays the first RMD to April, after their bday year but then also has to take THAT year's RMD for that double-whammy trigger.

Then two years later that's when a lot of folks "discover" the IRMAA penalty. Taxes, the gift that keeps you giving (or them taking).

 

[kgtest]

Then two years later that's when a lot of folks "discover" the IRMAA penalty. Taxes, the gift that keeps you giving (or them taking).

The QUAD-FECTA!

RMD + RMD + SS + IRMAA = QUAD-FECTA!

With all this tax revenue you'd think we.... ahh heck nevah mind!

 

[frayne]

Mods, please Porky this thread before my tax liability goes up any more!

 

[Venturer]

OP here, thanks everyone ---( I think) We haven't taken much from our IRA's at all since we retired. We took some for our trips and haven't really thought about it much. But looking now and learning we may be in trouble. I will definatly take my 1st one in 2025, since my DW will be having to take hers in 2026 and that alone will be a double whammy that year. Ohh well I'm just glad we ain't broke altho it looks like unk sam will be happier to get more!

 

[NXR7]

I would too except I have both an IRA and 401k.


Since I must withdraw RMD's from those separately, I'm not necessarily going to try to do them at the same time.

Is that accurate? I thought that the total RMD amount for all accounts could come out of just one account.