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07-28-2011, 11:35 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Location: Madison
Posts: 1,337
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RMD's
Do RMD's have to come out of each IRA? Or can you take the total amount out of one and leave the other IRA's alone?
Trying to figure out how the gov wants to get its $
__________________
Wild Bill shoulda taken more out of his IRA when he could have. . . .
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07-28-2011, 11:37 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Each IRA has its own RMD, but you can add them all up and take it all out of one if you want........
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Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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07-28-2011, 11:57 AM
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#3
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: Reading, MA
Posts: 1,789
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FD is correct.
Is the pain issue with RMDs that some folks have so much in tax-sheltered assets that the RMD each year after 70.5 puts them in the marginal 33% or higher Federal bracket?
Whereas had they withdrawn modest chunks each year back in their 60's they would have been able to stay in the marginal 25% or 28% bracket.
Because either way, the Feds are gunna get a piece if we live long enough...
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07-28-2011, 12:03 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2006
Posts: 12,483
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Quote:
Originally Posted by TheWizard
FD is correct.
Is the pain issue with RMDs that some folks have so much in tax-sheltered assets that the RMD each year after 70.5 puts them in the marginal 33% or higher Federal bracket?
Whereas had they withdrawn modest chunks each year back in their 60's they would have been able to stay in the marginal 25% or 28% bracket.
Because either way, the Feds are gunna get a piece if we live long enough...
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Most people don't want to pay more taxes, even if we are in relatively lower tax bracket times. People should have been taking some every year and reinvesting it if not needed to pay the lower tax now versus the higher taxes later, which is inevitable.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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07-28-2011, 12:28 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,871
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Quote:
Originally Posted by FinanceDude
Most people don't want to pay more taxes, even if we are in relatively lower tax bracket times. People should have been taking some every year and reinvesting it if not needed to pay the lower tax now versus the higher taxes later, which is inevitable.........
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Agreed. I've been working on this for some time now.
One caveat. Be certain to run the numbers (eg., estimate what your RMDs could be, based on leaving money in or what they would be by taking some out now.) Be certain to estimate other sources of income along the way. e.g., I'm going to take SS at 70 (current plan).
This all turns out to be a bit complicated (at least for a tax-dummy like me).
Personally, I would err on the side of taking more now as I expect that I am actually one of the "rich" people that will eventually be taxed to pay for the deficit. Never saw anything close to $250,000/year while w*rking (even further away now). Still, those of us who saved are a juicy target for those who didn't save. Even juicier for those folks who want to buy the votes of those who didn't save - using our money, of course. But I'm not bitter! Oh, and YMMV.
__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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07-29-2011, 07:34 AM
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#6
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Location: Madison
Posts: 1,337
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I asked since there may be years where my weighting in stocks in one IRA may be the one I'd like to take $ from. I'm thinking each year in my 60's I will take out just enough to be in a lower tax rate and live off that. Or transfer any extra into a Roth.
Would taking down all of my IRA's in my 60's be smart (i.e. wait until 70 for SS) and then live off SS and Roth money?
__________________
Wild Bill shoulda taken more out of his IRA when he could have. . . .
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07-29-2011, 08:19 AM
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#7
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
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Quote:
Originally Posted by dtbach
Would taking down all of my IRA's in my 60's be smart (i.e. wait until 70 for SS) and then live off SS and Roth money?
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We are, but that's only because of our specific situation. As in all discussions of this type, it all depends - on your specific situation.
We chose not to convert to Roth's for two reasons. First being that if we die early (or late), the majority of our tax-deferred holdings will pass on to our named charities, with no tax due (under current tax laws).
The second is that we don't want to do a draw down on our taxable funds to just pay taxes, not knowing what the future will bring.
So with me (DW soon to follow) in retirement, I just withdraw from my TIRA account for current expenses and pay current taxes. I would rather the remainder stay in the market (regardless of current gyrations) for the long term and pay taxes (or not), depending on what happens a bit later, at the end of my life.
That's just what we are doing, based on our situation. Others will certainly have other alternatives - based upon their goals/lifestyles...
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07-29-2011, 09:31 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Quote:
Originally Posted by rescueme
We chose not to convert to Roth's for two reasons. First being that if we die early (or late), the majority of our tax-deferred holdings will pass on to our named charities, with no tax due (under current tax laws).
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Exactly the best things to leave to survivors are in taxable accounts since there is then no income tax in respect of decedent (assuming not estate tax eligible). Of course even if there were it is in essence the charity's problem.
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07-29-2011, 09:39 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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RMDs are not such a bad problem to have.
Just perhaps, it's time to spend a little more of that nestegg. If the taxes are higher then so be it.
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07-29-2011, 09:43 AM
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#10
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
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Quote:
Originally Posted by MasterBlaster
RMDs are not such a bad problem to have.
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U R correct. The challange is with "excess RMD's" - that is the requirement to withdraw beyond your retirement budget.
While DW/me will have this "challange" in six years, we don't see it as a real problem.
We will just invest the "excess" in taxable accounts.
Actually, we consider ourselves "blessed", since we have a bit more than we expected to meet our retirement expenses. Many folks do not/will not have that "challange"...
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07-29-2011, 09:48 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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Quote:
Originally Posted by rescueme
U R correct. The challange is with "excess RMD's" - that is the requirement to withdraw beyond your retirement budget.
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RMD distributions are more than reasonable over your lifetime.
Maybe you should consider raising the retirement budget bar while you are still able to enjoy it.
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07-29-2011, 05:12 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Apr 2011
Location: Madison
Posts: 1,337
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Quote:
Originally Posted by MasterBlaster
RMDs are not such a bad problem to have.
Just perhaps, it's time to spend a little more of that nestegg. If the taxes are higher then so be it.
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I agree. But I think its better to take out how ever much you can in your 60's with tax planning, so that your RMD's when required won't be pushing you into an unintended higher bracket.
__________________
Wild Bill shoulda taken more out of his IRA when he could have. . . .
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07-29-2011, 05:32 PM
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#13
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
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Quote:
Originally Posted by MasterBlaster
Maybe you should consider raising the retirement budget bar while you are still able to enjoy it.
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In our case, that's not an option we will persue. We are also providing additional funds to our (disabled) son's SNT trust from our residuial estate after we're both gone.
We certainly don't "deprive" ourselves in any way. We do everything we planned/wanted to do in retirement (I'm retired - DW will join me when she's ready).
And when my son passes (normal life span expected), the residuial will be going to our named charities.
Not a normal situation when only the "current generation" needs to worry about funding only their retirement needs, for the rest of their lives, rather than also needing to fund another generation.
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