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10-22-2023, 07:53 PM
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#1
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Recycles dryer sheets
Join Date: Oct 2014
Location: San Antonio
Posts: 366
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How to manage RMD’s
For those who don’t need RMD’s to cover operational and occasional capital/lumpy expenses what do you do with them?
I’m pondering converting them to Roth, less tax, so if we need them later or leave them to kids they will be tax free. Is this reasonable? I realize this is a first world problem…but still a problem.
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10-22-2023, 08:07 PM
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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: Jun 2016
Location: Colorado
Posts: 8,877
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You can’t convert an RMD to a Roth.
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10-22-2023, 08:11 PM
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#3
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,536
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__________________
Spending my time as wisely as I can, since I don’t know what my time account balance is.
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10-22-2023, 08:14 PM
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#4
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Full time employment: Posting here.
Join Date: Feb 2007
Posts: 593
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We plan to utilize Qualified Charitable Contributions (QCD) for most or all of our RMD if needed.
__________________
Dreamin' of Streamin'
FIRE'd at 52 on 7/8/11
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10-22-2023, 08:16 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: Jun 2016
Location: Colorado
Posts: 8,877
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 Quote:
Originally Posted by Car-Guy
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The OP needs earned income, RMD is not earned and can only then invest $7500 into the Roth.
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10-22-2023, 08:16 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,764
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Reinvest in a taxable account.
__________________
Earning money is an action, saving money is a behavior, growing money takes a well diversified portfolio and the discipline to ignore market swings.
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10-22-2023, 08:20 PM
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#7
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2013
Location: Texas
Posts: 10,536
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+1
__________________
Spending my time as wisely as I can, since I don’t know what my time account balance is.
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10-22-2023, 08:21 PM
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#8
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Recycles dryer sheets
Join Date: Oct 2014
Location: San Antonio
Posts: 366
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Car-guy,
Thank you for the link. Very helpful.
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10-22-2023, 09:49 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Oct 2019
Posts: 3,486
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Quote:
Originally Posted by Sanstar
Car-guy,
Thank you for the link. Very helpful.
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From that link, "The Internal Revenue Service (IRS) requires that you have enough earned income to cover your Roth IRA contribution for the year—but the actual source of your contribution need not be directly from a paycheck."
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11-18-2023, 08:42 AM
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#10
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Full time employment: Posting here.
Join Date: Aug 2007
Posts: 567
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Question about an annuity and RMD's. I'm 67 and I'll have to start taking RMD's in about 5 years. If I buy a 10 year annuity in the next few months, in general, are there government laws/provisions with annuities to allow RMD's without taking a penalty? Or is that dependent on the actual annuity provisions/rules?
I'm trying to decide whether I want to roll over an annuity that is maturing soon over to a new annuity.
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11-18-2023, 11:07 AM
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#11
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Oct 2017
Location: Chapel Hill, NC
Posts: 5,203
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Quote:
Originally Posted by nvestysly
We plan to utilize Qualified Charitable Contributions (QCD) for most or all of our RMD if needed.
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We do this every year, make gifts to charities from our IRAs and then we have very little RMDs to take.
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11-18-2023, 11:09 AM
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#12
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Apr 2015
Posts: 5,449
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Quote:
Originally Posted by frayne
Reinvest in a taxable account.
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Agree
__________________
Give a Man a fish, he will eat for a day.
Teach a Man to fish, he will eat for a lifetime.
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11-18-2023, 11:14 AM
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#13
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Moderator
Join Date: Feb 2010
Location: Flyover country
Posts: 24,459
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Quote:
Originally Posted by DallasGuy
Question about an annuity and RMD's. I'm 67 and I'll have to start taking RMD's in about 5 years. If I buy a 10 year annuity in the next few months, in general, are there government laws/provisions with annuities to allow RMD's without taking a penalty? Or is that dependent on the actual annuity provisions/rules?
I'm trying to decide whether I want to roll over an annuity that is maturing soon over to a new annuity.
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It's complicated. This page may get you started.
Annuity Inside an IRA: Know the Rules
__________________
I thought growing old would take longer.
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11-20-2023, 09:12 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Nov 2008
Posts: 3,276
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In the past it has been going into MM funds. This year we have been reinvesting our RMDs into CDs. Not sure for next year.
Cheers!
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11-20-2023, 11:41 AM
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#15
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Thinks s/he gets paid by the post
Join Date: Jul 2003
Location: Pasadena CA
Posts: 3,302
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QCD or just reinvest (after paying taxes) in a taxable account. Or BTD
__________________
T.S. Eliot:
Old men ought to be explorers
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11-20-2023, 05:10 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Jun 2002
Posts: 1,619
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Quote:
Originally Posted by harllee
We do this every year, make gifts to charities from our IRAs and then we have very little RMDs to take.
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Another advantage of QCDs - amounts donated via QCD do not show up in your MAGI. If you are getting close to an IRMAA threshold, using QCDs is a good way to give yourself some breathing room.
__________________
friar1610
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11-20-2023, 05:14 PM
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#17
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 20,642
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Quote:
Originally Posted by yakers
QCD or just reinvest (after paying taxes) in a taxable account. Or BTD
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Those are the only options for anyone without earned income AFAIK.
__________________
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: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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11-20-2023, 07:00 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Jul 2002
Posts: 1,540
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My RMDs are either used in lieu of estimated federal taxes or in lieu of charitable giving (
QCDs). Just today I took my RMD for 2023 from my 401k with 100% federal withholding.
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