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Old 03-28-2020, 01:37 PM   #41
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Originally Posted by Yarnstormer View Post
yes. the RMD is from an inherited IRA. When I can, I use it to fully fund my Roth IRA instead of blowing it. I was shifting stuff around in January anyway so for some reason it seemed like a good idea to go ahead and do that. I'm partially retired I guess still working part time self employed. If I did not have the RMD tho, I don't think I could scrape up the roth money so there's that. I am 57.
Oh, I see! So it's a regular contribution to your Roth IRA based on your earned income. I think you are out of luck for this year since it's probably been more than 60 days since you took the RMD and as you said, you might not be able to scrape up the money to put it back.
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Old 03-28-2020, 01:50 PM   #42
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Please post if you find a more definitive citation. I always thought of Kiplinger's as reliable because they have that nice printed magazine.

Hard to know who to believe anymore.

I haven't taken the inherited IRA RMD yet. I don't need the cash and would rather not take it if that option is available.
In addition to Forbes, there's also the following Kitces article:

https://www.kitces.com/blog/analyzin...irus-pandemic/

Quote:

"Section 2203 of the CARES Act amends IRC Section 401(a)(9) to suspend Required Minimum Distributions (RMDs) during 2020. The relief provided by this provision is broad and applies to Traditional IRAs, SEP IRAs, and SIMPLE IRAs, as well as 401(k), 403(b), and Governmental 457(b) plans.
Furthermore, the relief applies to both retirement account owners, themselves, as well as to beneficiaries taking stretch distributions."

I tend to trust Kitces more than Kiplinger's, but YMMV.
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Old 03-28-2020, 02:00 PM   #43
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The only thing I see in there that's specific to inherited accounts is: "(II) if clause (ii) of subparagraph (B) applies, the 5-year period described in such clause shall be determined without regard to calendar year 2020.íí So to me, that would mean that if you inherit an IRA in 2020 that would normally be subject to the 5-year distribution rule, you would get an extra year to empty it. If you inherit an account this year that is subject to the 10-year rule, you don't get any relief.
That part about the 10-year rule is unfortunate. It doesn't apply to me, thankfully, so I don't have to worry about it.

But I wonder if an argument could be made that someone subject to the 10-year rule could skip a year based on the fact that the 10-year rule was created by taking the 5-year rule and changing "5" to "10". Probably not.

(The above assumes that the 10 year period we're talking about here is the SECURE Act new 10 year period for IRAs inherited after 12/31/19. If not, please disregard.)
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Old 03-28-2020, 02:34 PM   #44
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I am thinking this would be a good time to take the last bit of cash in Mr. A's tiny 401K and put it into VWELX.
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Old 03-28-2020, 02:39 PM   #45
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I was expecting this action on RMDs. I think that they did this (suspend) once before. Does anyone else recall if I am correct? As I have always said, "it's not a loss/gain unless you take the cash out."
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Old 03-28-2020, 03:36 PM   #46
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I already took 2/3 of mine .I wonder if I can just skip the last third ?
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Old 03-28-2020, 03:46 PM   #47
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I already took 2/3 of mine .I wonder if I can just skip the last third ?
Yes, if you are referencing an RMD from your IRA, not an inherited one.

I've taken about 1/3 of mine and will take more, but not 100% of what was required before the govt said "never mind."
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Old 03-28-2020, 03:49 PM   #48
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Of course the issue of RMDs also includes the question of what future tax rates will be,
many say that tax rates have no where to go but up, so taking a withdrawal might make sense as for example if you look at the 2017 tax rates and figure the difference with current tax rates, you might if the market climbs back get some of the tax back in market gains. (or not). best bet now might be to wait till oct and decide what to do then.
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Old 03-28-2020, 04:34 PM   #49
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Yes, if you are referencing an RMD from your IRA, not an inherited one.

I've taken about 1/3 of mine and will take more, but not 100% of what was required before the govt said "never mind."
Emphasis added.

I think it's OK to stop even if it's an inherited IRA. See:

https://www.early-retirement.org/for...ml#post2399244
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Old 03-28-2020, 04:46 PM   #50
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Well, I took about 22% of my 2020 RMDs (all from inherited IRAs) just because I had a need for the cash. I usually take the whole thing near the end of the year, but this year it was easier to take part of the RMD earlier. I was going to wait until 4Q to take the rest anyway, especially after the drop, but now I'll definitely want to know decisively if I need to take it or not first.
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Old 03-28-2020, 04:57 PM   #51
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Emphasis added.

I think it's OK to stop even if it's an inherited IRA. See:

https://www.early-retirement.org/for...ml#post2399244
Good info.

I included the inherited IRA qualifier in my response only because I have not looked at the revised RMD requirements for inherited IRAs. Sorry if it caused any confusion.
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Old 03-28-2020, 05:32 PM   #52
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I just finished a test on TT for next year's taxes without my RMD (haven't taken it yet). Since we have no pensions and just SS, without my RMD, I will pay $0 in Fed tax!

(using after tax cash account to get through the year)
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Old 03-28-2020, 05:46 PM   #53
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I just finished a test on TT for next year's taxes without my RMD (haven't taken it yet). Since we have no pensions and just SS, without my RMD, I will pay $0 in Fed tax!

(using after tax cash account to get through the year)
You should add RMDs in TT until the tax gets to be greater than 0. That way you will not be wasting any of the tax free space.
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Old 03-28-2020, 05:58 PM   #54
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just a reminder ..............that probably none of you need. Some folks are detail-oriented focusing on the minutia like when the tax filing is due, when the tax payment is due, when the estimated tax is due. With Federal and state and time-varying requirements as the institutions change their mind, there has been a lot to keep up with. Now comes the no RMD rule for 2020 and I am wondering if the institutions will institute something of their own (guessing not) or whether you have to customize any auto-RMDs that you have. In the midst of all this, and having had relatively stable income for the past few yrs, I have estimated tax numbers on my brain. Only today did I integrate the whole process and realize that the estimated tax payments will be cut in half due to no (more) RMDs........so don't make the same mistake.
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Old 03-28-2020, 06:35 PM   #55
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just a reminder ..............that probably none of you need. Some folks are detail-oriented focusing on the minutia like when the tax filing is due, when the tax payment is due, when the estimated tax is due. With Federal and state and time-varying requirements as the institutions change their mind, there has been a lot to keep up with. Now comes the no RMD rule for 2020 and I am wondering if the institutions will institute something of their own (guessing not) or whether you have to customize any auto-RMDs that you have. In the midst of all this, and having had relatively stable income for the past few yrs, I have estimated tax numbers on my brain. Only today did I integrate the whole process and realize that the estimated tax payments will be cut in half due to no (more) RMDs........so don't make the same mistake.
It'd be nice if Vanguard (and other IRA custodians) would develop an option to suspend auto-RMDs until 1/1/21 and then restart them. I'll wait a few days for them to get the code written before giving them a call...

My Dad does federal withholding as part of his Vanguard auto-RMD; may be an option for you rather than estimated payments...?
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Old 03-28-2020, 07:01 PM   #56
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You should add RMDs in TT until the tax gets to be greater than 0. That way you will not be wasting any of the tax free space.
Agreed! That's the next exercise. Another issue will be when the additional income added in triggers taxing our SS income significantly.

I really have to have a better guess at the interest I will end up adding into taxable as income as I have a pot full of CD's. But that's not too hard to get close with.
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Old 03-29-2020, 03:32 AM   #57
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I hadnít heard about this. Thatís the only stimulus I will get. Glad I wait until late in the year to take them.
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Old 03-29-2020, 08:33 AM   #58
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Part of stimulus bill:

................................................

I thus presume there's no such thing as QCD's for 2020 either. Maybe a bad presumption.
I believe that is incorrect. There is only a minor correlation of QCDs and RMDs.....that is, if you want to be efficient and withdraw as little as possible,you will make the QCDs part of the RMD.

On the other hand, if you had already taken your RMD, you can still take QCDs.
For this yr, the RMD is 0, but you can take your QCDs as in any other yr.
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Old 03-29-2020, 08:45 AM   #59
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I just finished a test on TT for next year's taxes without my RMD (haven't taken it yet). Since we have no pensions and just SS, without my RMD, I will pay $0 in Fed tax!

(using after tax cash account to get through the year)
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You should add RMDs in TT until the tax gets to be greater than 0. That way you will not be wasting any of the tax free space.
Iíd even go a little further and fill up the 10% bracket. Might not be much, but itís 10%. Pretty darn low.
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Old 04-01-2020, 10:17 AM   #60
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Iíd even go a little further and fill up the 10% bracket. Might not be much, but itís 10%. Pretty darn low.
I top off to the 0% bracket. Loss of ACA makes the 10% bracket a lot more than 10%... something like 24%.
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