Sometimes it takes a 2x4 upside the head for the obvious to
sink in.
The other day while studying the tax effects of converting
a Traditional IRA to a ROTH, it dawned on me that the
advise of using after-tax money to pay the tax due on
the ROTH conversion ALSO APPLIES TO PAYING THE TAX
ON RMDs. Talk about a "duh" moment.
Since this is an early retiree board, most of you have not
entered the RMD phase (except maybe Jarhead), but please
pass this tip on to your parents:
Don't let the financial institution withhold tax. Pay the tax
out of savings, if possible. This will help your IRA live longer.
Cheers,
Charlie
sink in.
The other day while studying the tax effects of converting
a Traditional IRA to a ROTH, it dawned on me that the
advise of using after-tax money to pay the tax due on
the ROTH conversion ALSO APPLIES TO PAYING THE TAX
ON RMDs. Talk about a "duh" moment.
Since this is an early retiree board, most of you have not
entered the RMD phase (except maybe Jarhead), but please
pass this tip on to your parents:
Don't let the financial institution withhold tax. Pay the tax
out of savings, if possible. This will help your IRA live longer.
Cheers,
Charlie