Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-10-2020, 05:03 PM   #21
Thinks s/he gets paid by the post
Koolau's Avatar
 
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 4,580
Quote:
Originally Posted by OldShooter View Post
Thanks for the flowers, but I am a very lazy person. Every time I go to my Schwab IRA account to withdraw money, they tell me how much I have withdrawn YTD and remind me of my RMD. It's on the same page as the withdrawal form. So it's really zero effort to monitor. I'll just have to remember that early 2021 the Schwab number may not be dead nuts precise.

Re pulling early in the year, any time we sell it is a market timing decision. I don't leave my money in the IRA because I'm necessarily trying to capture the year's growth. I just never know where the market is going, so dribbling it out is kind of a reverse DCA. If I wanted to avoid market effects I could just sell any necessary equities on January 2nd and leave the money in the account to earn the current pittance.
I'll have to admit: I have NO idea what my 401(k) manager would do if I did a partial RMD withdrawal - or no RMD withdrawal at all! For all I know, they'd let me take the unreal 50% penalty 'cause they never reminded me! I probably should ask them. Naaaaaahhh! Too much effort - did I mention I don't w*rk anymore.

I've mentioned before that, at least, I only have ONE thing to remember - my 401(k). I converted all (my and DW's) tIRAs to Roths prior to RMDs. For ME, that was as elegant as I get. Thanks for your thoughts because My Mileage May Vary!
__________________
Ko'olau's Law -

Anything which can be used can be misused. Anything which can be misused will be.
Koolau 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 10-10-2020, 05:21 PM   #22
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 4,665
Quote:
Originally Posted by OldShooter View Post
I'm not sure I understand the concern about 1/1 here unless someone wants to take their whole RMD right away. We just draw as we need money and monitor where we are with the RMD number to make sure we're compliant by year end. No urgency at all to know an exact number.
I'll explain the concern.

Before doing so, let me point out that my concerns are over something that is not a big deal, so people are feel to consider me to be obsessing over nits or whatever other phrase they would like to use.

As mentioned above, my father has his traditional IRA at Vanguard. He is 85 and therefore is subject to RMD rules. Being 85 and of lessened mental acuity, he has set up an automatic RMD, which is a service Vanguard offers to their clients. He has chosen to set it up so that the sale of assets within the IRA, the federal income tax withholding, and the transfer to his taxable account all takes place automatically. He has further chosen to do these withdrawals monthly on the 15th of the month.

So Vanguard automatically looks at his age and 12/31 IRA balance, calculates his RMD based on the RMD table, and then takes 1/12th of that amount every month.

This benefits my Dad because he doesn't have to worry about his RMD (he sometimes does anyway as he is a bit forgetful), minimizes his taxable income, and gives him an even and regular cash flow.

If the new tables are not approved in time, Vanguard will presumably use the existing RMD table, make the RMD calculation, divide by 12, and do a transaction on 1/15/21 with that number.

If the new tables subsequently are approved for 2021 use, then my Dad's 1/15/21 withdrawal will be about 8.1% too much. Depending on when in the year Vanguard is able to switch over to the new table, my Dad's 2/15/21 withdrawal may be too much by 8.1% as well. Ditto for March, April, May, etc.

It is unclear what Vanguard will do or should do in this case. Switch to the new, 8.1% lower amount part of the way through the year? Keep taking out 8.1% too much? Let my Dad decide? Take out proportionally less for subsequent months so that only his RMD is taken out?

Whatever happens, it is likely to make it harder for my Dad to achieve his goals of simplicity, tax minimization, RMD compliance, and regular even income in 2021.

Again, totally not a big deal, and I'm sure Vanguard and my Dad will make good choices and we'll make it work, but those are the concerns I have.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 10-10-2020, 06:38 PM   #23
Thinks s/he gets paid by the post
Souschef's Avatar
 
Join Date: Dec 2015
Location: Santa Paula
Posts: 3,046
I have my RMD's scheduled throughout the year. January, April, June and September to pay my estimated taxes. Then June, July, August and September for our son's birthdays.
I also have a couple of QCD's scheduled. I am an Excel nut, so it is all in a spreadsheet I update yearly.
YMMV
__________________
Retired Jan 2009 Have not looked back.
AA 60/35/5 considering SS and pensions a SP annuity
WR 2% with 2SS & 2 Pensions
Souschef is offline   Reply With Quote
Old 10-10-2020, 06:45 PM   #24
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RobbieB's Avatar
 
Join Date: Mar 2016
Location: Central CA
Posts: 5,752
I'm ahead of the game. I'm taking before they're required.
__________________
Retired at 59 in 2014. Should have done it sooner but I worried too much.
RobbieB is online now   Reply With Quote
Old 11-19-2020, 01:39 PM   #25
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 4,665
Well, I needen't have worried, which is of course usually the case (me worrying and not needing to). I really should learn.

The IRS has approved the new tables but they're in effect starting in 2022, per this post and link from the very helpful @cathy63:

https://www.early-retirement.org/for...ml#post2513581
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 11-19-2020, 03:53 PM   #26
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: 27,469
Thanks for the update!
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-19-2020, 04:58 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 16,111
Example:
Quote:
The life expectancy tables and applicable distribution period tables in the regulations generally reflect longer life expectancies than the formerly applicable tables. For example, a 72-year-old IRA owner who applied the former Uniform Lifetime Table to calculate RMDs used a life expectancy of 25.6 years. Applying the Uniform Lifetime Table set forth in the new regulations, a 72-year-old IRA owner will use a life expectancy of 27.4 years to calculate RMDs.

The effect of these changes is to reduce RMDs generally, which will allow participants to retain larger amounts in their retirement plans to account for the possibility they may live longer, the IRS says.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 40% equity funds / 35% bond funds / 25% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is online now   Reply With Quote
Old 11-19-2020, 05:28 PM   #28
Full time employment: Posting here.
 
Join Date: Oct 2019
Posts: 841
As far as I looked the withdrawal percentages are the same, just that you have an additional 1-1/2 years before you have to start. That does make sense.
Hopefully Secure Act 2.0 will pass and push it to 75. Yippee, 4.5 more years to do Roth Conversions.
Time2 is offline   Reply With Quote
Old 11-19-2020, 05:40 PM   #29
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 4,665
Quote:
Originally Posted by Time2 View Post
As far as I looked the withdrawal percentages are the same, just that you have an additional 1-1/2 years before you have to start
The new RMD tables have higher divisors than the current RMD tables. For my Dad (84), there is an 8.1% reduction in the amount he has to take (in 2022).

Yes, the SECURE Act pushed required beginning date to age 72. Two different things.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 11-19-2020, 07:10 PM   #30
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: 27,469
Quote:
Originally Posted by Time2 View Post
As far as I looked the withdrawal percentages are the same, just that you have an additional 1-1/2 years before you have to start. That does make sense.
Hopefully Secure Act 2.0 will pass and push it to 75. Yippee, 4.5 more years to do Roth Conversions.
No, the withdrawal percentages for each age group are slightly lower with the new tables.

They now expect people to live a bit longer, so they let you take out a bit less each year.
__________________
Retired since summer 1999.
audreyh1 is offline   Reply With Quote
Old 11-20-2020, 08:11 AM   #31
Full time employment: Posting here.
 
Join Date: Oct 2019
Posts: 841
Quote:
Originally Posted by audreyh1 View Post
No, the withdrawal percentages for each age group are slightly lower with the new tables.

They now expect people to live a bit longer, so they let you take out a bit less each year.

Yep, you all are right, I looked at the first two years and saw they had the same distribution period 27.4 years and 26.5 years. The 3rd your decreases from 25.6 to 25.5 years. By 85 yrs old the difference is 1.2 years. By 100 yrs old, the difference is back to 0.1 year.



OLD TABLE- https://www.required-minimum-distrib...com/rmd-table/


NEW TABLE- https://www.currentfederaltaxdevelop...inning-in-2022
Time2 is offline   Reply With Quote
Reply

Tags
irs, rmd, tables


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
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
Tables in posts IndependentlyPoor Forum Admin 6 09-21-2009 04:52 PM
Need Help Posting Tables haha Forum Admin 19 04-15-2009 05:17 AM
Reserves/NG and the 40-year pay tables Nords FIRE and Money 9 02-15-2007 11:12 PM
Billiards Tables...Info please Maneiac Other topics 5 11-14-2006 07:58 AM

» Quick Links

 
All times are GMT -6. The time now is 02:07 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.