How to Make the Most of Your Required Minimum Distribution (Part 1)

Over the years, we’ve received more questions about required minimum distributions (RMD) than just about anything else - and because there’s so much information out there, I’m tackling this topic in a three-part series.

In today’s episode (Part 1), I dive into the basics of the required minimum distributions, how they relate to accounts like your IRA, 401k, and Roth IRA, as well as how to calculate this amount. If you’re not careful, the required minimum distribution can become a ticking tax time bomb. However, you can effectively utilize the benefits of the Tax Cuts and Jobs Act, as well as smart financial strategy, to ultimately reduce the total amount of taxes you have to pay.

In this podcast interview, you’ll learn:

  • Why you have to take money out from your IRA - and how to calculate what you're going to need to withdraw.
  • What happens if you delay your required minimum distribution - and why it likely doesn't make a lot of tax sense.
  • The one benefit the IRS gives you when it comes to withdrawing from multiple accounts - and what the IRS really cares about.
  • When you may want to roll a 401(k) into an IRA, to take better control over where your money is being pulled from.
  • Why you can't rely on your custodian - and the penalties you may face by failing to take minimum distributions.
  • How to use the joint life expectancy table to reduce your required minimum distribution if your partner is 10 years younger than you.

If you enjoyed this episode, stay tuned for Part 2 of this series, as I’m going to dive deep into strategies for reducing your required minimum distributions. And if you’d like to calculate your RMD, Click here to download a table that makes as easy as 1-2-3!

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