Join Early Retirement Today
Reply
 
Thread Tools Display Modes
RMD?
Old 10-03-2017, 07:33 PM   #1
Thinks s/he gets paid by the post
 
Join Date: Aug 2017
Posts: 2,050
RMD?

I realized my success rate is okay taking the amount I think I need, rather than the higher RMD I will eventually have to take. How do you all account of that?
badatmath is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-03-2017, 07:44 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
Add the incremental fed and state taxes the annual RMD will generate to the spend number for each RMD year.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-03-2017, 07:45 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Jun 2013
Posts: 1,019
The RMD doesn't need to be spent, but you'll have to pay taxes on the distribution, so I would just adjust spending accordingly to include those taxes.
Which Roger is offline   Reply With Quote
Old 10-04-2017, 05:58 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 11,317
Just figure in enough increased spending to account for the tax increase/
__________________
Idleness is fatal only to the mediocre -- Albert Camus
donheff is offline   Reply With Quote
Old 10-04-2017, 07:03 AM   #5
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,198
Very common misperception. Many people forget that just because you have to move the RMD amount out of your TIRA, you don't have to spend it -- just pay the taxes and put the remainder in your after-tax account.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 10-04-2017, 07:10 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2011
Posts: 8,361
Quote:
Originally Posted by braumeister View Post
Very common misperception. Many people forget that just because you have to move the RMD amount out of your TIRA, you don't have to spend it -- just pay the taxes and put the remainder in your after-tax account.
I'm also curious as to how close people's RMD is to their current IRA withdrawals. I'm 5 years away from RMD but my current withdrawals are within $3-4K of what my RMD would be anyway. Pretty much no change for me. "Oh, I have to withdraw another $3k?...oh, ok"
__________________
Living well is the best revenge!
Retired @ 52 in 2005
marko is online now   Reply With Quote
Old 10-04-2017, 07:17 AM   #7
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,004
Quote:
Originally Posted by marko View Post
I'm also curious as to how close people's RMD is to their current IRA withdrawals. I'm 5 years away from RMD but my current withdrawals are within $3-4K of what my RMD would be anyway. Pretty much no change for me. "Oh, I have to withdraw another $3k?...oh, ok"
I hit RMD's for the first time this year and this ^ accurately describes my situation. DW starts RMD's next year and at that point we will have to decide what to do with the excess amount over our needs. (No, I'm not going to send it to any of you, so don't bother asking! )
__________________
Numbers is hard
REWahoo is offline   Reply With Quote
Old 10-04-2017, 07:50 AM   #8
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 47,472
Quote:
Originally Posted by marko View Post
I'm also curious as to how close people's RMD is to their current IRA withdrawals. I'm 5 years away from RMD but my current withdrawals are within $3-4K of what my RMD would be anyway. Pretty much no change for me. "Oh, I have to withdraw another $3k?...oh, ok"
My RMD starts next year. I already figured out that my current equal monthly TSP withdrawals will be enough to meet RMD requirements until my TSP account runs out of money at approximately age 94. At that age, I will just live off a bit larger withdrawal from my taxable accounts, to make up for the lack of TSP payments, plus I will still have SS and mini-pension. No big deal.

Each year the TSP will provide a double check on my computations and send more money if necessary to meet RMD requirements, which is nice.

I have always planned to spend all of that account on my retirement rather than passing it on to my heirs, and as I understand it that is the point of RMD's.

FIRECalc just tells me how much I can spend (including taxes). It doesn't tell me how much I can or must withdraw from each of my various investment accounts. In my case I don't think RMDs will create an excess, but if so it can go in my taxable investment accounts which are also part of my portfolio.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.

Happily retired since 2009, at age 61. Best years of my life by far!
W2R is offline   Reply With Quote
Old 10-04-2017, 08:09 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,006
Quote:
Originally Posted by donheff View Post
Just figure in enough increased spending to account for the tax increase/
Exactly!
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 10-04-2017, 04:45 PM   #10
Thinks s/he gets paid by the post
 
Join Date: Aug 2017
Posts: 2,050
I don't really have an equivalent place to put the money. Shoving it into a 1% account is not going to work since I will have to live on the profits. I guess I have time to work on it.

I thought this would only be complicated for rich folks but I am DEFINITELY not one of those.
badatmath is online now   Reply With Quote
Old 10-04-2017, 04:49 PM   #11
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,198
Quote:
Originally Posted by badatmath View Post
to take more out than I am spending seems really inconvenient and would affect my returns for the money. Shoving it into a 1% account is not going to work.
Was it inconvenient deferring the taxes all those years? You really didn't have to open the IRA, you know.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 10-04-2017, 05:21 PM   #12
Thinks s/he gets paid by the post
 
Join Date: Aug 2017
Posts: 2,050
Quote:
Originally Posted by braumeister View Post
Was it inconvenient deferring the taxes all those years? You really didn't have to open the IRA, you know.
Starting to look like I should not have done so as I would have paid less (total) tax I think.
badatmath is online now   Reply With Quote
Old 10-04-2017, 05:34 PM   #13
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
Quote:
Originally Posted by badatmath View Post
I don't really have an equivalent place to put the money. Shoving it into a 1% account is not going to work since I will have to live on the profits. I guess I have time to work on it.

I thought this would only be complicated for rich folks but I am DEFINITELY not one of those.
except for the tax deferral you can of course take the remainder of the RMD (after taxes) and invest it the same way you did in the tax deferred account or in a more tax efficient way. So no need to stuff it in a 1% account but buy stocks or mutual funds with it.
meierlde is offline   Reply With Quote
Old 10-04-2017, 05:35 PM   #14
Moderator
braumeister's Avatar
 
Join Date: Feb 2010
Location: Flyover country
Posts: 25,198
Quote:
Originally Posted by badatmath View Post
Starting to look like I should not have done so as I would have paid less (total) tax I think.
I think you should relax about that -- it's a really tough calculation even for those who are good at math (that's not me, by the way).

Consider all the extra money you had in your IRA because it came from pretax earnings. That's a lot of loot that earned more of the same all those years. Looking at the big picture, you're probably going to wind up ahead of the game because of that.

Of course, that's only my gut feeling and may not be exactly correct, but I wouldn't worry about it. You kept the tax man away for a long time and now you'll have to settle up with him no matter what.
__________________
I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 10-04-2017, 05:38 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
Quote:
Originally Posted by badatmath View Post
Starting to look like I should not have done so as I would have paid less (total) tax I think.
If you took the money you put into the IRA/401k and assumed constant tax rates and system you would pay less. The whole assumption on the original 401k is that income would be lower in retirement than before thus lower taxes. The various tax reductions in the 80s 90s and 00s mean that you have to compare by year saved not with todays rates.
Of course if you rollover to an IRA you can directly contribute to charity and not have it show up as taxable nor affect the part B premium.
meierlde is offline   Reply With Quote
Old 10-07-2017, 06:58 AM   #16
Full time employment: Posting here.
 
Join Date: Sep 2017
Posts: 816
I plan to start Roth conversions as soon as I retire, to lower my future RMD and give me more flexibility in future withdrawals and spending. Not to mention that all the gains in the Roths will be tax free.
albireo13 is offline   Reply With Quote
Old 10-07-2017, 10:25 AM   #17
Recycles dryer sheets
 
Join Date: May 2016
Posts: 313
Is there a forward looking software program/application can be used to estimate taxes, RMD's, 401K, Roth, tIRA, regular investment accounts, and the like? I know that i-ORP does some forward looking on account management/distributions.
CDRE is offline   Reply With Quote
Old 10-07-2017, 10:29 AM   #18
Administrator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 40,583
This thread is not about FIRECalc and is general interest, so I moved it into the FIRE and Money forum and edited the title.
MichaelB is online now   Reply With Quote
Old 10-07-2017, 10:38 AM   #19
gone traveling
 
Join Date: Apr 2011
Posts: 3,375
Quote:
Originally Posted by badatmath View Post
I realized my success rate is okay taking the amount I think I need, rather than the higher RMD I will eventually have to take. How do you all account of that?
Just give the extra to charities straight from the IRA account. It doesn't count as income, so your life doesn't change in any way except for gaining the satisfaction of helping others.
gerntz is offline   Reply With Quote
Old 10-07-2017, 02:20 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,671
RMD is a requirement to pay taxes, not a requirement to spend.
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
IRA RMD True or False TromboneAl FIRE and Money 8 07-09-2006 09:51 AM
IRA RMD render SWR moot? hogwild FIRE and Money 28 07-08-2006 02:39 PM
RMD Tip charlie FIRE and Money 8 03-03-2006 01:12 PM
IRA RMD Stuff TromboneAl FIRE and Money 12 02-15-2006 06:08 AM
Did you miss the RMD last year? mickeyd Life after FIRE 4 01-14-2005 09:07 AM

» Quick Links

 
All times are GMT -6. The time now is 10:01 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.