Fidelity Retirement Analysis and RMD

[bizlady]

I need an explanation from someone who has done the online Fidelity retirement analysis with regards to the RMD.

The yearly spend is equal to sources of income (SS and pension in our case) plus the withdraw from savings.

But there is an RMD amount that is over the amount we need to withdraw, and that amount is over and above the total spend when SS, Pension and Withdrawal are added to equal the spend.

How does Fidelity treat that extra RMD amount? Does it assume you add that to an after-tax savings account?

And if so, does it assume you draw that first?

Could not find any online documentation about this.

 

[Souschef]

IMO, you have to tell Fido what you want to do. Since we do not need the funds from DW's RMD, I have Fido transfer the RMD amount from a fund in her IRA to her after tax account.
I did the same thing for a number of years also.

 

[COcheesehead]

In the tool, RMD plus the withdrawal from savings = your total expenses. If that number is a negative, - meaning you have more - then the funds (the overage) stays in your asset pool. You should be able to verify this by looking at your beginning savings amount the year after the withdrawals.
My RMDs are never over my total expenses. You need to spend more LOL.

 

[COcheesehead]

IMO, you have to tell Fido what you want to do. Since we do not need the funds from DW's RMD, I have Fido transfer the RMD amount from a fund in her IRA to her after tax account.
I did the same thing for a number of years also.

She is talking about the results in the planner tool.

 

[braumeister]

But there is an RMD amount that is over the amount we need to withdraw, and that amount is over and above the total spend when SS, Pension and Withdrawal are added to equal the spend.

Just because you have to withdraw from your IRA (RMD), there is no requirement to actually spend it. Something that is often forgotten when folks do this sort of planning.

 

[G-Man]

In the tool, RMD plus the withdrawal from savings = your total expenses. If that number is a negative, - meaning you have more - then the funds (the overage) stays in your asset pool. You should be able to verify this by looking at your beginning savings amount the year after the withdrawals.
My RMDs are never over my total expenses. You need to spend more LOL.

Can you provide a screenshot.

 

[latexman]

I need an explanation from someone who has done the online Fidelity retirement analysis with regards to the RMD.

The yearly spend is equal to sources of income (SS and pension in our case) plus the withdraw from savings.

But there is an RMD amount that is over the amount we need to withdraw, and that amount is over and above the total spend when SS, Pension and Withdrawal are added to equal the spend.

How does Fidelity treat that extra RMD amount? Does it assume you add that to an after-tax savings account?

And if so, does it assume you draw that first?

Could not find any online documentation about this.

Download the Retirement Analysis Methodology.pdf and do a RMD word search in it (18 hits in mine).

The tool seems to be very thorough and calculates the RMDs from almost every concievable source, even inherited accounts. But, the RMD value reported in the table form, is just that, reported only. Here's the pertinent quote from my Retirement Analysis Methodology.pdf.

After RMD amounts are withdrawn from retirement accounts (excluding pension plans), the Tool assumes these savings are redeposited in a hypothetical taxable account and are available to meet retirement goal expenses.

 

[COcheesehead]

Can you provide a screenshot.

Prefer not to since it would disclose a lot of personal information, but if you view the results from the tool in the “table” view, the answer becomes clearer.

 

[G-Man]

Prefer not to since it would disclose a lot of personal information, but if you view the results from the tool in the “table” view, the answer becomes clearer.

For me at age 72, my pension and SS is enough to pay for my total expenses. So, I don't need to withdraw from my 401K funds.

However, at age 72, I have a Minimum required distribution that is required but I don't need the funds. This occurs until age 92 where the "Withdrawals from Savings" is less than the "Minimum Required Distributions". At age 92, is where large dollar amounts for long-term care kicks in.

I guess I need to spend more before I reach the age of 72.

Does that sound right?

 

[braumeister]

If that RMD requirement really bothers you, you could always skip it and instead use QCDs to donate the same amount to your favorite charities. That would reduce your IRA balance the same as taking RMDs but cause no taxable event.

 

[Bamaman]

All I know is that this is my first RMD year, and I've got to withdraw far more from my IRA Rollover account at Fidelity than I made in my highest income year. That's good. What's also good is I have no need for any of the $ until about age 80.

But I've remained moderately aggressive playing the equities--only Fidelity's best accounts. I just hope my conservative accounts will cover my RMD's until there can be a market recovery.

 

[COcheesehead]

I wonder if people don’t realize that the question is about how the Fidelity tool handles RMDs in relation to total expenses and not about RMDs in general.

 

[latexman]

I wonder if people don’t realize that the question is about how the Fidelity tool handles RMDs in relation to total expenses and not about RMDs in general.

Looks like it’s about 50/50.

 

[COcheesehead]

Looks like it’s about 50/50.

 

[G-Man]

In the tool, RMD plus the withdrawal from savings = your total expenses. If that number is a negative, - meaning you have more - then the funds (the overage) stays in your asset pool. You should be able to verify this by looking at your beginning savings amount the year after the withdrawals.
My RMDs are never over my total expenses. You need to spend more LOL.

I'm not sure I understand what to check for and I do have RMD at age 72.

 

[COcheesehead]

I'm not sure I understand what to check for and I do have RMD at age 72.

Run the tool, click on display setting - “table” once you have the results, then click “withdrawals”. It will show required RMDs when they become necessary.

 

[G-Man]

Run the tool, click on display setting - “table” once you have the results, then click “withdrawals”. It will show required RMDs when they become necessary.

Yes. I see the RMDs starting at age 72. So that is telling me that I have not withdrawn enough during my earlier years.

 

[COcheesehead]

Yes. I see the RMDs starting at age 72. So that is telling me that I have not withdrawn enough during my earlier years.

It’s a forecast amount based on many factors. Use it as a guide, not an absolute.

 

[bizlady]

Download the Retirement Analysis Methodology.pdf and do a RMD word search in it (18 hits in mine).

The tool seems to be very thorough and calculates the RMDs from almost every concievable source, even inherited accounts. But, the RMD value reported in the table form, is just that, reported only. Here's the pertinent quote from my Retirement Analysis Methodology.pdf.

THIS was super helpful to have as a reference and did answer my question- thank you!

 

[latexman]