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basic rmd questions
Old 02-26-2021, 09:45 AM   #1
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basic rmd questions

we are 62 and 57, so not close to RMD considerations, but we were nevertheless discussing...questions that came up

1. any strategies related to planning for RMD? (like I know that it is good to pull from roth as a last option)
2. are traditional vs roth vs 401k handled differently regarding RMD? We have all 3
3. is there a maximum limit for withdrawals per year
4. do you withdraw monthly or yearly or is that just personal preference
5. 401k money is in vanguard I assume I would contact them for setting the appropriate distribution schedule

thanks in advance
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Old 02-26-2021, 10:10 AM   #2
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1. Consider whether a Roth conversion is worthwhile to you, to reduce later RMDs. Usually the best time to convert is once you're retired (making less income) but haven't yet started SS, pension, and RMDs. If you are in a lower tax bracket now than when RMDs will hit, Roth conversions are probably a good idea. Work with your numbers to see. And btw, Roth isn't always the last option to pull from.

2. No RMDs on Roths.

3. No max limit on withdrawals or conversions

4. There was a recent thread on this, search for it.

5. Depends on what you want to do. You may be able to do it without contacting them, but if you have questions, go ahead. My concern is the people they have answering the phone at places like this may not always know and sometimes give bad answers.
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Old 02-26-2021, 10:59 AM   #3
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thank you

I initiated some roth conversions for 2021 yesterday...missed out on 2020 unfortunately (first retirement year, income very low)

I will search the other RMD threads, but I can say I think you provided much of what I was looking for, many thanks.
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Old 02-26-2021, 11:58 AM   #4
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2. Each 401k plan is a stand-alone entity for the calculation and distributions of RMDs. But each of you is considered by the IRS of having a single TIRA no matter how many accounts at different financial institutions you may have. The RMD for TIRAs is based upon the sum of all your TIRAs. Your IRA RMD can be withdrawn from only one account or multiple accounts, but the sum of withdrawals need to equal or exceed your TIRA RMD for that year.
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Old 02-26-2021, 12:14 PM   #5
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OP - if you have a roth 401K, you will probably want to roll it over to a roth, so you avoid RMD's on the roth 401K

https://www.kiplinger.com/article/re...0distributions
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Old 02-26-2021, 01:10 PM   #6
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Quote:
Originally Posted by Sunset View Post
OP - if you have a roth 401K, you will probably want to roll it over to a roth, so you avoid RMD's on the roth 401K

https://www.kiplinger.com/article/re...0distributions
it's currently just a 401k -- I'll have to check into getting it into roth -- high interest

That article is helpful...I'll point towards getting it all into roth ira.
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Old 02-26-2021, 01:13 PM   #7
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Quote:
Originally Posted by RE2Boys View Post
2. Each 401k plan is a stand-alone entity for the calculation and distributions of RMDs. But each of you is considered by the IRS of having a single TIRA no matter how many accounts at different financial institutions you may have. The RMD for TIRAs is based upon the sum of all your TIRAs. Your IRA RMD can be withdrawn from only one account or multiple accounts, but the sum of withdrawals need to equal or exceed your TIRA RMD for that year.
I anticipate us having no TIRA by the end of next year...although I have a good amount in 401k that I should ideally get into Roth - that will be my tax booger down the road if I don't act now.
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