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If the CD comes due and the proceeds go into a cash or money market account WITHIN the same IRA, it is not a withdrawal. That cash can then be used to buy another CD (or whatever) WITHIN the same IRA or some of it can be withdrawn as part/all of the RMD required for the total value of the IRA (all the CDs within the IRA).
That's all true, but that's not the scenario that BBC laid out. His example was to cash out the CD at Bank 1 and set up a new IRA at Bank 2. Bank 1 will treat that as a withdrawal of the CD value.
Why is that unreal? You still have the money, less the taxes you paid on the RMD. 401k's are not designed to keep your money tax free forever.
I'm just amazed at the investments we've accumulated espeically since my 401 tanked in 2008/2009. I made a pretty good bet and quadrupled my holdings in that account in less than 4 years and then played the ups and downs of our company stock prior to getting out of it completely. Thank goodness - that stock is down something like 60% this year.
If that's the case, then be sure each bank knows you will be taking your RMDs yourself. Otherwise, each bank will try to set you up to take RMD payments out of each of them each year. Just be sure they know that.
That's right, and it's important to know that you don't have to take RMDs from each account - the IRS only cares that the total RMD you take, from all accounts, is at least the right percentage of your overall assets subject to the RMD.
I just checked, and at least I have a weak excuse for not knowing about RMDs until about 2006. They were incorporated into tax code in 1987. So I was already doing my 401ks for years at that point, but at 29, retirement seemed a far off dream and like many in my career I was certianly less concerned about what might happen at 70, than say, oh, about anything. Plus, I had already started my career that included a pension, so I had a vague idea money wouldn’t be an issue. Just young & dumb about such matters.
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