U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Retirement
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 07-21-2014, 01:34 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705

Advertisements

Quote:
Originally Posted by reed303 View Post
"Required" RMDs don't start until 70.5. You can start UNreguired withdrawals from 59.5 to 70.5, which I have done for last 9 years, to reduce the amount of RMDs at 70.5
Bada Bing! Spoken like a man who has the money and knows the deal of what they need to do.
Reply With Quote Quick reply to this message

 
Old 07-21-2014, 04:02 PM
 
Location: Delray Beach
1,136 posts, read 1,439,949 times
Reputation: 2510
^^^^ Yup.
Start & suspend or outright delay SS, during which time you withdraw and/or Roth-convert $$ from retirement accounts at lower tax rates than if you were receiving SS. Invest in tax-frees if this is more than you need to live on.

If you have too much in qualified retirement plans to make any difference, you have my condolences!
Reply With Quote Quick reply to this message
 
Old 07-21-2014, 04:19 PM
 
71,626 posts, read 71,751,865 times
Reputation: 49222
Quote:
Originally Posted by blktoptrvl View Post
By the time I hit 70, I should have about 1.5M in my IRA account.

At that time I will be forced to take the yearly RMD of 3-4%

This is money I won't need, and I would prefer not to pay the tax hit, leaving it where it is so that it can continue to generate money would be best; but it seems at this point withdrawal will not be avoidable.

So, where do you move your RMD when you don't need it?
most fund families offer the same fund choices in and out of tax deferred accounts. just put it right back in what you had it in if you have that option...
Reply With Quote Quick reply to this message
 
Old 07-21-2014, 04:23 PM
 
29,782 posts, read 34,871,258 times
Reputation: 11705
Quote:
Originally Posted by tjarado View Post
^^^^ Yup.
Start & suspend or outright delay SS, during which time you withdraw and/or Roth-convert $$ from retirement accounts at lower tax rates than if you were receiving SS. Invest in tax-frees if this is more than you need to live on.

If you have too much in qualified retirement plans to make any difference, you have my condolences!
RMD's aren't the worse thing in the world. It does mean you have the money. Folks also need to consider if the legal protections from bankrupty and or civil suits is worth giving up if they don't have to.
http://www.ehow.com/info_7742292_leg...1k-vs-ira.html
Reply With Quote Quick reply to this message
 
Old 07-21-2014, 05:28 PM
 
Location: Portland, Oregon
10,008 posts, read 16,671,715 times
Reputation: 6417
Quote:
Originally Posted by LookingatFL View Post
I might talk to my CPA about buying an annuity through my IRA account to see how that would affect RMD and income tax.
Don't do that!!! An annuity does not belong in an IRA.

Unless your IRA contains your former employer's stock a distribution is taxable, period. Once it is out of your IRA you could invest it in dividend paying stocks, S&P 500 fund or a dividend focused ETF/mutual fund. Unless you have high taxable income dividends are taxed at a lower rate.

When it comes to taxes it is pay me now or pay me later. Before you are required to take MRDs move assets from your regular IRA to a Roth IRA. You will pay tax at transfer but no tax when you draw it down.
Reply With Quote Quick reply to this message
 
Old 07-21-2014, 06:11 PM
 
71,626 posts, read 71,751,865 times
Reputation: 49222
While it used to be advised not to buy annuities in ira's new tax rulings are allowing 401k's annuity plans that will be exempt from rmd requirements.

While the irs okayed it i would wait a bit to see if the tax courts object and over turn the tax status.

Ask any retiree who's social security is about to be taxed for a lifetime once rmd's get combined with it how they would have wished they had that option.
Reply With Quote Quick reply to this message
 
Old 07-21-2014, 06:14 PM
 
Location: SC
8,791 posts, read 5,659,431 times
Reputation: 12805
Quote:
Originally Posted by mathjak107 View Post
most fund families offer the same fund choices in and out of tax deferred accounts. just put it right back in what you had it in if you have that option...
I buy equities not funds... But i guess there is no reason i cannot start converting to funds.
Thanks.

Thanks all for the ideas.
Reply With Quote Quick reply to this message
 
Old 07-21-2014, 06:18 PM
 
71,626 posts, read 71,751,865 times
Reputation: 49222
So take the money and buy the same stocks in your taxable account with money.
Reply With Quote Quick reply to this message
 
Old 07-21-2014, 07:05 PM
 
Location: OH>IL>CO>CT
5,237 posts, read 8,406,103 times
Reputation: 7191
Quote:
Originally Posted by CCc girl View Post
Reed, what did you do with the withdrawal money?

Also, isn't it eight percent? or four?
1. Being very risk-averse, they have gone into Bank CD's. Future actual RMDs may go into Mutual Funds, at the same custodian who holds the IRA.

2. Technically RMDs are not a % of account balance. (Leave it to IRS to make it complicated) You would need to read this IRS Pub http://www.irs.gov/Retirement-Plans/...ibutions-(RMDs) to understand the "factor" number they make you use. My first RMD has a factor of 26.5, the math is: (acct bal divided by factor = withdrawal). Mathematically that equals 3.7%. Each year is different. At my age 90 the factor goes down to 11.4 but the equivalent % goes up to 8.7% So it's a sliding scale as the balance (usually) decreases year by year. There are different "factor" charts depending to your personal tax situation. So YMMV
Reply With Quote Quick reply to this message
 
Old 07-24-2014, 11:19 AM
 
18,859 posts, read 13,616,392 times
Reputation: 14281
Quote:
Originally Posted by reed303 View Post
"Required" RMDs don't start until 70.5. You can start UNreguired withdrawals from 59.5 to 70.5, which I have done for last 9 years, to reduce the amount of RMDs at 70.5
That's a bad misstatement on my part. I should have said reduce the value before 70 1/2
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Retirement
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2019, Advameg, Inc. · Please obey Forum Rules · Terms of Use and Privacy Policy · Bug Bounty

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top