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Old 01-19-2015, 04:20 PM
 
Location: Southern California
372 posts, read 449,551 times
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[quote=johngolf;38086194]We have had to take RMD's for the last several years. We do not need the money so we simply reinvest it. For a year or two we put it back in the same Fidelity Funds it was in before (just not IRA's anymore). Last few we have been sending it to Vanguard Wellington Fund.[/QUOTE

We are also moving money into Wellington and Wellesley so that when we don't want to have to think so hard about it, it'll be managed for us. Between those two funds, CD ladders, and liquid savings, that'll eventually be about all I'll want to deal with.
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Old 01-19-2015, 04:34 PM
 
29,837 posts, read 34,924,704 times
Reputation: 11755
[quote=Goin' Coastal;38088327]
Quote:
Originally Posted by johngolf View Post
We have had to take RMD's for the last several years. We do not need the money so we simply reinvest it. For a year or two we put it back in the same Fidelity Funds it was in before (just not IRA's anymore). Last few we have been sending it to Vanguard Wellington Fund.[/QUOTE

We are also moving money into Wellington and Wellesley so that when we don't want to have to think so hard about it, it'll be managed for us. Between those two funds, CD ladders, and liquid savings, that'll eventually be about all I'll want to deal with.
I hear you clearly, I am evolving in that direction also along with a four index fund portfolio.
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Old 03-16-2016, 12:58 PM
 
Location: SW US
2,226 posts, read 2,043,303 times
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Another issue has come up now. My tax preparer told me that roughly 30% of my first RMD this year will go to taxes because it puts me over some limit for taxation on SS and substantially raises the taxable percentage.

I remember that some time, maybe last summer, someone on C-D mentioned a special new kind of deferred annuity that could be funded with a percentage of your IRA. My accountant didn't know what that was, but I'm wondering now if I should do that. What are they called?
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Old 03-16-2016, 01:15 PM
 
5,402 posts, read 6,554,145 times
Reputation: 10477
Interesting question.


I just spoke with my USAA (fund custodians) about what might be the best way for me to handle IRA withdrawals in preparation for required withdrawals.


He mentioned a personal pension where I give X amount of my IRA to USAA Life, pay the taxes, get a monthly 'pension type' check, and upon my passing whatever remains of X amount would go to my beneficiaries. Sounded like a reverse mortgage concept with IRA liquidity being exchanged for monthly income.


Told him I would think about it, but I am not sold with the idea enough to jump on it.


Has anyone opted for personal pensions as a means to plus up monthly income in your 60s and to reduce mandatory disbursement tax bite in your 70s and thereafter?




for now, I am leaning toward not going this direction but some of you all may have had good experience with it.


thanks Judy
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Old 03-16-2016, 03:28 PM
 
Location: Central Massachusetts
4,800 posts, read 4,861,663 times
Reputation: 6379
Quote:
Originally Posted by theoldnorthstate View Post
Interesting question.


I just spoke with my USAA (fund custodians) about what might be the best way for me to handle IRA withdrawals in preparation for required withdrawals.


He mentioned a personal pension where I give X amount of my IRA to USAA Life, pay the taxes, get a monthly 'pension type' check, and upon my passing whatever remains of X amount would go to my beneficiaries. Sounded like a reverse mortgage concept with IRA liquidity being exchanged for monthly income.


Told him I would think about it, but I am not sold with the idea enough to jump on it.


Has anyone opted for personal pensions as a means to plus up monthly income in your 60s and to reduce mandatory disbursement tax bite in your 70s and thereafter?




for now, I am leaning toward not going this direction but some of you all may have had good experience with it.


thanks Judy

I think that is not an option. I know that at RMD you are not allowed to save for retirement unless you are working and even then I think there are even restrictions there too. If you are planning on leaving it to heirs you can create a Roth for them to the tune of the max of I think 10k per year or a bit more. That is about the only thing I can think of but others will have ideas I am sure.
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Old 03-16-2016, 03:46 PM
 
Location: SW US
2,226 posts, read 2,043,303 times
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I'm not sure I see the advantage of this option. You pay taxes on the full value of the IRA when you give it to USAA? This would create a year of high income that could screw up both Social Security and Medicare, or maybe not SS if you are not yet taking it. And are the "pension" payments tax exempt for some reason?
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Old 03-16-2016, 03:53 PM
NCN
 
Location: NC/SC Border Patrol
21,135 posts, read 21,916,505 times
Reputation: 23222
I am starting an account to use to buy a condo in the sand hills when I get tired of yard work. Then I can downsize and rent the home we own.
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Old 03-16-2016, 04:28 PM
 
5,402 posts, read 6,554,145 times
Reputation: 10477
I like your ideas and have decided the personal pension is not for me

Thanks for the good input
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Old 03-16-2016, 11:48 PM
 
Location: Living rent free in your head
31,178 posts, read 13,676,183 times
Reputation: 22219
We put our mandatory distributions in Betterment, we have it in a stable portfolio and while it will never make us rich it beats inflation by a bit.
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Old 03-17-2016, 10:54 AM
 
Location: Columbia SC
9,019 posts, read 7,787,258 times
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Quote:
Originally Posted by Windwalker2 View Post
So, after decades of saving, now I have to withdraw money that I don't need from my IRA . It's a rather small amount. My plan is to continue to save so that I can afford decent care when I need it.
Would appreciate thoughts on what to do with the money I have to withdraw. A deferred annuity maybe, except I don't know when I might need the money.
I assume you are talking about an MRD (Minimum Required Distribution).

Reinvest it. I reinvested some of it in the same mutual funds I had to take it from. Same funds, just not an IRA. As an example I now have two Fidelity Growth Fund accounts. One is a declared IRA, one is MRD money I had to take from the IRA. I never saw the money, I just had Fidelity do the transfer. I also did not have any taxes taken out. I will deal with that issue later. I also invested some in another mutual fund with another company, Vanguard.
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