Reddit Posts
Do I need a FA to get my annual RMD from an inherited IRA?
Advice needed on portfolio management choices
Xiaomi assets equals dept to the precision of last stated digit in Q2 2023
40y/o, 52k in my Roth IRA split between $36k in FSKAX, 6.5k in Microsoft 17.5k Tesla and about 7k in “cash available to trade”. Should I go all in on Tesla?
How are Required Minimum Distributions paid out when the funds are invested in stocks?
Ray Liotta died in his sleep at age 67. He probably had a heart attack. If he had a heart attack, it was probably caused by undiagnosed sleep apnea. Sleep apnea affects close to a billion people worldwide and goes undiagnosed in 80% of cases. Save lives, long Resmed (RMD).
Ray Liotta died in his sleep at age 67. He probably died from undiagnosed sleep apnea. Save lives, long Resmed (RMD).
Ray Liotta died in his sleep at age 67. He probably had a heart attack. If he had a heart attack, it was probably caused by undiagnosed sleep apnea. Sleep apnea affects close to a billion people worldwide and goes undiagnosed in 80% of cases.
Does Government's Forced Rothifying of Catch Up Contributions Change The Conventional Wisdom About Roth's In Your 20's?
Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.
Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.
Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.
Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.
Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.
Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.
Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.
Sleep stocks, specifically sleep apnea stocks, will do quite well the next decade.
Where's my snorers at? The bullish case for sleep apnea stocks.
Why is no one talking about RMD? Almost up 13% in the last week alone
RMD is gonna Rise. Recall Immenent for Respironics.
The Initial Stock Challenge: Search for the stock with the same ticker tag as your initials.
Mentions
For my wife and me, our SS plus pensions will easily cover our monthly expenses but I plan on doing regular withdrawals just to reduce my RMD requirements in the future. I'm currently living off dividend income automatically withdrawn in the beginning of the month until SS and pensions kick in over the next 2-5 years. Automated monthly 401k withdrawals also pays taxes so I don't need to worry about paying estimated taxes. I am strategizing not owing anything for taxes plus or minus a few hundred bucks
Important to look into RMD's here to see what, if any, your minimum requirement is every year. Vanguard has an article on best practice for traditional IRA's... basically that in most cases it's best to try to spread it out in equal chunks: https://corporate.vanguard.com/content/corporatesite/us/en/corp/articles/minimize-taxes-inherited-ira-distributions.html Roth, if possible, I think you'd be best to defer and put off as long as possible to maximize tax-sheltered benefits for any assets within them. Overall this is probably a question best suited for a CPA.
From Schwab app (I also have a Schwab account, but inherited IRA is at Vanguard) Set up recurring RMDs through Schwab MoneyLink®. Your annual RMD will be automatically calculated and then transferred to the account you designate. (To enroll, visit Schwab.com or call 800-435-4000.)
What brokerage do you use? Vanguard has a feature to set automatic RMD distributions.
Likely high single digit percent but depends. Plug into the Schwab inherited IRA RMD calculator to nail it down exactly. https://www.schwab.com/ira/ira-calculators/inherited-ira-rmd-calculator
The dividend is priced into the stock price. If you don't want to hold the stock, sell it all. No reason to time the market with your RMD, you can do a lump sum or break it up into monthly or quarterly distributions.
Ha! just here braggin', my BENE IRA from 2004 has been RMD'ing for 20+ years now. Glorious! Sorry for you and all since, but that 2019 law change suchs.
There are some spicy rumors swirling about an $IXHL buyout or partnership. From what I've gathered, it looks like Resmed $RMD. IXHL will be getting PR this week of the change over to NASDAQ Capital Market. Phase 2 Topline results are expected to follow shortly. https://preview.redd.it/49kvoorstt9f1.png?width=958&format=png&auto=webp&s=09d1ac27606d9dbb684b779df15344a216aa62b2
We have 40% in taxable,40% in IRAs/401ks, 20 in Roth. CG on taxable draws will be around 60% for our first year of retirement. We wont pay much tax at all until SS draw and RMD time. Flexibility is really what I’m getting at. Don’t put ALL of your eggs in IRAs, especially if you are retiring early.
Qualified Charitable Distribution (QCD). You donate whatever you don't want as RMD income. The charity must be 501c3 which makes it qualified. There are annual limits.
If you’re 40 start optimizing Roth and taxable. I worry about people having such huge 401k’s. They generally spend that money last and never enjoy their retirement. Can’t tell you how often i see people taking RMD, and when they die the vast majority is unspent IRA money. The vast majority of people don’t have near enough. And the ones that have enough end up not spending it all. Much like vitamins not really being the benefit so much as being the healthy type to even care to look up and take vitamins. Maybe talk to a financial planner. Even if for one time review fee. You’re obviously very frugal if you’ve been maxing for a while. Find a good trusted pro to do some planning while you’re so young.
Ok if you want to argue 401k vs Roth IRA, I think the Roth is better, assuming no 401k match. More flexibility with the Roth, no RMD’s, and you can withdraw the principal at any time. That is not true of the 401k. Why do so many people end up doing 401k conversions to Roth before retirement? I’d rather have more money in a Roth than a 401k, and this is coming from someone that has way more money in a 401k than a Roth.
In kind transfers are tax-free. If you liquidate, your taxes will be based on the proceeds v. cost basis. That is where it will be important for you to accurately document what the value of the security is on your father's date of death. This is for non-qualified accounts only. If it is a qualified account, make sure your father took his required RMD. Other than that, it won't matter, because you will have to take a distribution every year until the account is exhausted in ten years. You will be taxed no matter what.
LT Capital gains Brackets: Single up to $48.3k/Married up to $96.7k: 0% Single $48.3k - $533.4k/Married $96.7k - $600,050: 15% Single MAGI above $200k/Married $250k: 15% + 3.8% NIT Tax Single above $533.4k/Married over $600k: 20% + 3.8% NIT Tax >As far as I can tell an even bigger loophole if you have a lot in a taxable account is just to take 1 year off work, earn no income or just below the threshold, cash out and with income below the threshold pay no taxes on the gains? The gains themselves contribute to your taxable income, so it's not easy to do unless you have no other income at all. It could be a good way to retire early and pay way less taxes, but once you have social security at age 62, and RMD's after 73, you're bound to have some taxable income.
Thanks, considering such, I'm not under the gun on the RMD
Being that you're still working, are you working for the company that sponsors the 403b plan? If you are working for the company that sponsors your 403b or 401k, and are not an owner of the company, you don't need to take the RMD from that account until you leave that job. If you have outside IRA's you still need to take those RMD's but nothing from the plan that your current employer sponsors.
The max amount you can contribute to a QLAC is $210,000. Given that your current 403b value is $260k, I would recommend doing $100k into the QLAC. You can defer the QLAC up to age 85, you would then have $160k that counts towards your RMD calculations. Keep in mind that the QLAC is a fixed account so you don't have the ability to invest in the market or mutual funds like you can with your 403b. By having the QLAC, you can treat that as the bonds portion of your retirement account and be aggressive with your 403b. Think of it as shifting money from your 403b to your own personal pension. Assuming you defer it to age 80 and 85. You would have QLAC pension of approximately $1100 per month.
You worry about RMD and taxes but do you even know what the numbers are? Just some rough numbers: your marginal rate is 22%, if you stop working, you'll drop down to under 12% for sure. So you worry about RMD at 12% and think you should rather stop contributing to your 403b and pay 22% instead. Do you think that will give you more money?
No worries at all, feel free to reach out if you want more info as well, can break down what it is and how it can satisfy your RMD requirements.
QLAC - Qualified Longevity Annuity Contract sounds like it may fit your needs if you don't need the funds but need to satisfy RMD requirements.
As the RMD will most likely not be needed, I will probably reinvest it to offset the increased taxes to some degree
op not life insurance I specifically mean long term care insurance. It’s insurance that pays for care if your wife were to need to live an assisted living or something of that sort. There are hybrid vehicles that do have a portion of life insurance but it would specifically be for that purpose. If you mean just provide money in the long term I think you could consider IRAs as that would give you more tax deferral. You could open one in her name and put the money in that to avoid RMDs until she is 75. Also sadly you will have to take an RMD at 73 not 75. It’s 75 if you turn 75 AFTER 2030. Just a FYI
Ya, the RMD is just around the corner unless they raise it between now & then.
Money is about when you will spend. Anything you will spend in 2 years or less: SGOV (better than HYSA). After that, it should be invested in something that has a chance of beating inflation. It is never too late, but you should have learned this LONG ago. Soon you will be RMD age. Hopefully you can do the tech (you’re on Reddit). Honestly try to find an ethical trustworthy pro in your community to speak with. Maybe they don’t even manage your money. But you likely need help. But yea. All personal finance is the same: spend less than you earn, have emergency fund, the rest invest in something auto (don’t rely on self discipline), sell when you have something urgent to pay for, do that every month of your life. Best of luck
The way I look at it, today if I were to retire my income would be *far* less than it is today. That means that money would be at a far lower tax bracket. Traditional makes the most sense. Perhaps some day if I'm lucky enough my retirement savings will start to exceed what I'm making right now, in which case I'll start using Roth instead. Odds are though, considering I'm at or near my peak earning years, it's likely my retirement withdrawals will never be higher than what I'm making today. Especially if you think in terms of "real" dollars and adjusting for inflation. Those tax brackets will be a lot higher in 20-30 years. Lastly I think the Roth fans are trying to impose political beliefs into it. They usually assume the US will have to dramatically raise taxes in the future to cover the national debt and loss of the dollar's reserve status. First off, historically speaking taxes have gone down, not up. Secondly if the US is really that hard pressed for tax money, don't think they won't go after Roth. I doubt they'd overtly just tax it, but they can adjust the RMD tables and force you to cash out. Perhaps making the tables more aggressive for everyone or make it based on account balance. My point is there's lots of subtle ways to make people with Roth accounts pay, so don't think it's some "weird trick the IRS doesn't want you to know about!"
\>I hear guys on these pods say you will miss on hundreds of thousands by not doing Roth early on. That advice does not apply to you. It applies to people who are early on in their careers where many will only be in the 10%-12% tax bracket. You're not early on and already in the 24% tax bracket where you are losing 24% of your Roth 401K contribution to current year taxes. In a traditional 401K you don't pay taxes on the contributions. You do pay taxes on distributions when withdrawn later when you might be in a lower tax bracket. They won't let a traditional 401K grow tax free forever. There will be Required Minimum Distribution starting (currently) at age 73. The first year RMD is \~3.8% of the previous year end balance and decreases in percentage in the following years. Switching to a traditional 401K at the same percent of pay would give you some breathing room in your current take home cash flow. A mix of Roth and traditional is also an option.
\>the point of having both is to have flexibility so that you can always be taking out of the most tax advantaged account later on. Traditional IRAs and 401s have Required Minimum Distributions starting at (currently) age 73. The first year RMD is \~3.8% of the previous year end total. You can't always entirely take more exclusively out of the most tax advantaged account. They won't let traditionals grow tax free forever.
I’m so confused. lol but really someone tell me…now a good time to break up my 60/40 balanced fund IRA? Been thinking about it for about a yr. Retired. Don’t need RMD. Grandson will inherit my ira.
We sold half our stock portfolio in our IRA and including all of Apple, near the top in January. None of those stocks have advanced to Januarys level. The cash is in high yield while we shift gears and buy dividen stocks to cover the next 7 years. IRA account has RMD of seven years left before final withdrawal.
I’m nine years older than you, followed the invest almost all stock strategy until about two years ago and I’m really glad I did. Now I make so much more on the dividends and rentals that I almost never have to touch what’s invested, and can leave the IRA alone unlit RMD years. Go for it if 20% drops like in April won’t scare you away.👍
You realize (or maybe I should say you don't) that you can RMD cash and cash equiavlents, and even transfer in kind securities? To say you are forced to sell stock at low points is only accurate, if a person put them in that situation. And to say it's "lost and cannot be recovered" is also inaccurate wtih again with in kind transfer.
Bonds are the stable part you withdraw from unless doing a rebalance. So it depends on when you gonna take out how much. Not mad at 2 years expected expenses/distributions in BND or SGOV. Then take it from there with risk tolerance. It’s whatever lets you sleep at night for the rest. It is always a balancing act of risk on/risk off. But it is about spending, when will the money be liquidated and spent. Some people that is right after retirement, in my experience helping clients, they normally go into bonds way too early as they don’t even touch 401k until RMD time, they don’t want to pay taxes. Wild really when you think about it.
That’s about where I am at. I’ve been retired for 5+ years, primarily living off some passive income. Other than being mandated to take a RMD on an inherited IRA which is reinvested, I have yet to touch my retirement funds.
Same situation I have, but my father's was in Fidelity. Only thing I have to pay for is the tax on what I withdraw. (RMD's). I'm investing in that account as long as I can. Right or wrong, that's what I'd do
QYLD at these levels adding to already overweight position held covering expenses and RMD along with ARCC,STWD,ABR,OXLC,AGNC. Key point is buying these on dips as dividends paid out melts the NAV . At age 76, retired, willing to take risk in view of reward, I am enjoying the ride. All traded in IRA,dripping and constantly vigilant for opportunities. The power of compounding and the rule of 72 work very well for me!
I agree with your plan. But yes, be careful that the basis is actually stepped up before pulling the trigger across the board to avoid the hassle of fixing it afterwards. That type of mix of funds is likely a function of where she had her funds and perhaps from several different original sources. It's also evidence of an older school time when investors had less control and investing cost much more in fees. You talk like the entire inheritance is taxable - is there no IRA or 401k passing to you? If there is, be sure you understand the timing of when that must be drawn down. My siblings and I in inherited a taxable brokerage and BENE IRA back in 2004 after Dad died. I'm still drawing just an RMD from the IRA, it's grown very nicely. The taxable side helped us with buying a house at the time, and proceeds from the house we sold worked out to be about the same as the inherited amount we put into the new house. That's been growing nicely in a taxable brokerage ever since. I'm so sorry your Mom is nearing her end and you're dealing with this. It sounds like you're both lucky to have had the time together you have. You're smart to be thinking along these lines, and it's awesome you're as prepared as you are being aware of her holdings. I lost my Mom and Dad at 34 and 38, Mom to lung cancer and hospice was such a blessing. That organization and in particular the people that can do that work just amaze me. The pain and grief they see and yet are so helpful with would destroy so many people. Grief is strange. It's been 20+ years now and thinking of my parents still brings tears, but also great memories and feelings of love and gratitude. Find your way and don't be worried if it hits hard and you need to reach out to others for help. Feel free to ask me questions here. You can DM me if you prefer. Good luck - I have the feeling you'll do great.
Stock $IXHL take a look, here's why!!!! Based on Phase 2 end-of-study with great results, also merger talk with company RMD, and many calls between 15-50$ per share in the upcoming weeks, this is one of the top low cost stock in the pharma industry today. Evaluations are perfect and it's currently set to explode to 1.0, 5.0, to 25.0+ based on market calls. This is all based on the current evaluations. Do your DD always and invest.
Based on Phase 2 end-of-study with great results, also merger talk with company RMD, and many calls between 15-50$ per share in the upcoming weeks, this is one of the top low cost stock in the pharma industry today. Evaluations are perfect and it's currently set to explode to 1.0, 5.0, to 25.0+ based on market calls. This is all based on the current evaluations. Do your DD always and invest.
Hearing that IXHL is in discussions with RMD about merger, most likely at $15/share!! Go read, google it, and go to the atlantictrade server....
It's also a function of budget. When I was young, I was self employed and trying to keep a young family of 4 afloat. I was in a high enough tax bracket so given the tax savings, I was able to put away more into savings and reduce my tax bill. It was a THEN decision. Toady, I have an unfortunately large IRA and am going to be converting to ROTH between now and RMD time. The ROTH money will remain untouched for my kids. The last thing I want them to deal with is the inheritance of a large IRA. Art
Is it superior? Not always.. but as with any investment diversification, TAX optimization also needs to be considered. Tax avoidance is basically part of life when you have sizeable $$ income. That is where Roth comes in as one of your TOOL. The point is.. you shouldn't be limited to one type of tax advantage retirement account. If possible, maximize 401k and Roth and also have brokerage accounts. This will give you maximum freedom NOW and pay tax how you wish later on in life when you are no longer working. PS..having Roth and brokerage.. you can easily move pretax 401k to Roth at your own page prior to RMD age.
I thought the thinking that the Tax rate you invest in the Roth is less than the tax rate you withdraw from the Roth vs IRA. With that said, I make much more now than when I worked. Think 3x. I did Roth conversions from 58 to 63 when I retired at 58 and basically had no income but plenty of cash. Now I have a 400k Roth and I’m getting ready to face RMD’s on IRA’s. It’s extremely complicated. One thing about Roth money is there are no longer tax consequences. Or RMD’s. You can access that money without tax consequences. I like the Roth for sure. It gives you options when it is a bigger number.
Ok thank you for explaining this, I'm not on investing reddit very much and people kept talking about "Nana" in reference to intel and it was starting to freak me out. I have an inherited IRA that is entirely in Intel from my grandmother who I called Nana... It's nowhere near $700k but it's still a decent amount and I haven't touched it for like 20 years except to take the RMD, and now I'm trying to figure out what to do since the account value is like 30% of it's peak.
Do you have to choose between them or do you have the funds to do both? If you have to choose one. Then I suggest you do 403B first. Reasoning is this - base assumption: you’re older and not early on in your career. And your income is higher compared to when you’re retiring. - right now you’re at your peak income bracket let’s say effective tax rate of 28%. Putting money in before tax is more valuable. - once your retire and your SS and other fixed income halves that income (standard assumption). So now you’re withdrawing at a 15% tax rate. - math (100*1.10)*(0.85)=93.5. Your 100 contribution yields 93.5 after tax - alternatively Roth you’re putting after tax so your contribution is 100*(1-0.28)=72 - math (100*0.72)*(1.10)=79.2 so it’s less because you have less to invest less while losing on the tax differential A common Strat is once you retire you still work a little so you can keep contribute to Roth. You start converting some of that 403B to Roth at this point. This is to minimize the tax impact of the RMD once you hit 70
OP didn't mention if this money is an inherited IRA or post-tax money. Inherited IRA comes with 10 year RMD requirements, depending on the age of the uncle when he passed. Also, liquidating IRA (i.e., pre-tax) money has different tax considerations than post-tax (i.e., non IRA) money.
We are around 70, still working but clearly retirement is closer than for most. Holding more in cash mostly bc RMD starts next year, and no longer maxing out our 401k each month, putting that money toward closing out a couple of final debts and in a HYSA. Watching closely, we can still load up the 401k next fall if things start to miraculously look better but we just are too wary of the market with so little time to recover.
I am retired for 5 years but did not rebalance since I retired. When the tariffs hit and my accountant told me I was too aggressive for my age I just rebalanced to raise cash for long term security and a temporary retreat to 30% short term treasuries, 5% gold ETF, 5% REITs, 10% Asia ETF, 10% Europe ETF, 20% bonds, 50% dividend aristocrats large cap stocks, mostly ETFs and the balance mid and small caps. I do plan to rebalance again later this year depending on the direction of the tariffs and the economy. This mix is my IRA. I began the year mostly stocks and low cash, I had to sell stocks to raise money for funding my RMD.
I took my mom’s retirement money out of an actively managed account last October and it’s been sitting in cash ever since. Really unsure what to do with it because she doesn’t want to lose money, but she also doesn’t plan on touching that money except to take the RMD. She trusts me to make the right decision lol.
Generally speaking, the spending order in retirement should be taxable accounts first, then IRAs (and other pre-tax) when you hit RMD age (75 for many), then Roth assets last. By using Roth last, you allow it more time to grow tax free. This advice applies to most, but not all, situations.
Not to mention with few exceptions, the ira can’t be stretched. So 10 years can add more constraints re: taxes owed. And the RMD taxed as income does count towards irmma (Medicare premium calculations).
I have seen quite a few IRAs larger than $5 million. The biggest regret people have is RMD time. Taxes remain high in retirement and your heirs inherit an asset that requires more RMDs and ordinary income tax.
I said, it got more fun when I started cranking out $1000 a month. I didn't say when that started. It was long before the post 4 years ago. Thanks for the kudos but they are unearned. Despite making big bets, I run a fairly conservative portfolio. My dividend income in the 1st quarter of 2025 was $900 less than the 4th quarter of 2024. My goal isn't the most earnings per quarter, it is to maintain a dividend stream that fully pays for my RMD each year as well as capital gains. The big drop in income was due to adding MSFT, IBM and NVDA and selling REITs to cover the cost.
Useful investing books: - If You Can: How Millennials Can Get Rich Slowly – an excellent free 15 page PDF by William Bernstein: [DOWNLOAD LINK](https://www.etf.com/docs/IfYouCan.pdf) - I Will Teach You To Be Rich by Ramit Sethi - **The Simple Path To Wealth** by JL Collins - **The Little Book of Common Sense Investing** by John “Jack” Bogle - **A Random Walk Down Wall Street** by Burton Malkiel - **The Millionaire Next Door** by Thomas Stanley - **The Psychology of Money** by Morgan Housel - Winning the Loser’s Game by Charles Ellis - The Bogleheads’ Guide To Investing by Mel Lindauer, Taylor Larimore, Michael LeBoeuf - The Index Card by Helaine Olen, Harold Pollack - How A Second Grader Beats Wall Street by Allan Roth - Just Keep Buying by Nick Maggiulli - The White Coat Investor: A Doctor’s Guide to Personal Finance and Investing by James Dahle - How To Make Your Money Last by Jane Bryant Quinn - Retire Before Mom and Dad by Rob Berger - The Five Years Before You Retire by Emily Guy Birken - How To Plan for the Perfect Retirement by Dana Anspach (The Great Courses) - Retirement Planning Guidebook by Wade Pfau - Retirement Planning for Dummies by Matthew Krantz - The New Retirement Savings Time Bomb by Ed Slott - The Bogleheads’ Guide To Retirement Planning by Taylor Larimore et al - Living Off Your Money by Michael McClung - The Number by Lee Eisenberg - The Wealthy Gardner by John Soforic - The Richest Man in Babylon by George Clason (Also an updated “Modern Language Edition”) - The Wealthy Barber by David Chilton - Enough by John Bogel - Your Money or Your Life by Vicki Robin, Joe Dominguez - Early Retirement Extreme by Jacob Lund Fisker - Fables of Fortune: What Rich People Have That You Don’t Want by Richard Watts - Quit Like A Millionaire by Kristy Shen, Bryce Laung - Die with Zero by Bill Perkins - Against The Gods: The Remarkable Story of Risk by Peter Bernstein - Devil Take The Hindmost: A History of Financial Speculation by Edward Chancellor - In Pursuit of the Perfect Portfolio by Andrew W Lo and Stephen R Foerster - The Four Pillars of Investing by William Bernstein (second edition 2023) - All About Asset Allocation by Rick Ferri - The Missing Billionaires by Victor Haghani and James White Useful podcasts financial: - **The Money Guy Show** (Brian Preston and Bo Hanson) Since 2006 with over 823 episodes - **Morningstar The Long View** (Christine Benz and Jeffrey Ptak) Since 2019 over 227 episodes - **Rational Reminder** (Benjamin Felix and Cameron Passmore) Since 2018 with 275 episodes - Big Picture Retirement (Devin Carroll and John Ross) Since 2017 with over 164 episodes - Choose FI (Bard Barrett and Jonathan Mendosa) Since 2016 with over 599 episodes. - The Retirement & IRA Show (Jim Saulnier and Chris Stein) Since 2013 with 100 episodes - The Retirement Answer Man (Rodger Whitney) Since 2014 with over 493 episodes - Retirement Starts Today (Benjamin Brandt) Since 2015 with over 243 episodes - Sound Investing by Paul Merriman Since 2019 with over 403 episodes - How To Money (Joel Larsgaard and Matt Altmix) Since 2018 with 676 episodes - The Stacking Benjamins Show (Joe Saul-Sehy and Josh Bannerman) Since 2013, 991 episodes - Sound Retirement Planning (Jason Parker) Since 2009 with over 150 episodes - Stay Wealthy Retirement Show (Taylor Schulte) Since 2017 with over 170 episodes - Ready for Retirement (James Conole) Since 2020 with over 164 episodes - Talking Real Money (Don McDonald and Tom Cock) Since 2014 with over 1,200 episodes - Retirement Planning Education (Andy Panko) Since 2022 with over 76 episodes - Retire with Style (Wade Pfau and Alex Murguia) Since 2022 with over 68 episodes - The White Coat Investor (James Dahle) Since 2017 with over 436 episodes - Bogleheads Live (John Luskin) Since 2022 with over 44 episodes - **Bogleheads on Investing** (Rick Ferri) Since 2018 with over 57 episodes - The Newretirement Podcast (Steve Chen and Davorin Robison) Since 2018 with 71 episodes - Risk Parity Radio (Frank Vasquez) Since 2020 with over 300 episodes - **Your Money, Your Wealth** (Joe Anderson, Al Clopine) Since 2009, over 450 episodes - Mad Fientist (Brandon) Since 2012, over 73 episodes - The Long Game by Thomas Kopelman Since 2020 over 102 episodes - The Dough Roller Money Podcast Since 2013 with 369 episodes - **The Rob Berger Show** by Rob Berger 2020 with 120 episodes - Earn & Invest by Jordan Grumet (Doc G) Since 2018 with 482 episodes - Money For The Rest of Us by J David Stein Since 2014 with over 470 episodes Financial/retirement calculators: - calculator.net https://www.calculator.net/?fbclid=IwAR2ZN-hIGhQvq0mpoxf9GZzqSVo7dfIQZiVl4OCZLzxr08xrun2cWAxYFSw - Bogleheads WIKI list of > 45 calculators free and paid https://www.bogleheads.org/wiki/Retirement_calculators_and_spending - RetirePlan – an app for ipads only – my favorite for ease of use [RetirePlan app](https://apps.apple.com/us/app/retireplan/id435739013) - Rich, Dead, Broke (one of my favorites) – will your money last? [Rich Dead Broke](https://engaging-data.com/will-money-last-retire-early/) Uses historical dataset from Shiller back to 1871. - [FICalc](https://ficalc.app) Simulations run back to 1871 using Shiller’s dataset - [FIRE CALC](https://firecalc.com) Has Monte Carlo option - cFIREsim [Link 1](https://cfiresim.com) [Link 2]( https://alistair-marshall.github.io/cFIREsim-open/) Uses historical dataset from 1871 - The Four Percent Rule Calculator www.fourpercentrule.com - Retirement Withdrawal Calculator – nice 1 page setup - https://www.wealthmeta.com/calculator/retirement-withdrawal-calculator - [Portfolio Visualizer]( https://www.portfoliovisualizer.com/monte-carlo-simulation#analysisResults) uses Monte Carlo, several options available - New Retirement (the paid yearly version is very robust with ability to model Roth Conversions) It also models estimated inflation adjusted tax brackets – helpful to see what tax bracket you will be in during RMD drawdowns. [New Retirement](https://www.newretirement.com) Has Monte Carlo function - Note – projectionlab.com looks very similar but I have not tried it yet. [LINK]( https://projectionlab.com) Has Monte Carlo simulations - Retirement Budget Calculator https://www.retirementbudgetcalculator.com - Open Social Security – helps decide optimal withdrawal ages for spouses [Open Social Security](https://opensocialsecurity.com)
1099-B and 1099-DIV show you what you must report. I’m sure she’s a nice person but I would go with someone who hasn’t been taking an RMD for 10 years
They are not called stock brokers. They are called investment advisers. And it's not really just about a dollar amount, it about the complexity of your financial situation. Things like tax efficiency management, estate planning, RMD drawdowns, etc. etc. People aren't really using an investment adviser to pick stocks.
I did sell a little bit a while back but only because I have an account that I have to take RMD's from and didn't want to be forced to sell at low prices.
Been retired five years, 50% in stock mutual fund passive index the other 50% in Bonds mutual fund passive index and CDs. CDs cover my yearly RMD. So yeah, I wasn’t hit hard at all
I like to all some more clarity to my situation. I'm retired for last 5 years and have a large nest egg. I'm not working anymore, so I can't contribute to my 401K anymore. I also have large investments in a cash brokage account. So my mission is to protect the investment and make it last as long as possible. I haven't touch my 401K since I retired 5 years ago and probably will only start withdrawing the 401K when force to do so at 73 years old with RMD, required minmum distrbution. I also have a Roth IRA that doesn't have RMD. The buy and hold works with contributions over frequent periods to get dollar-cost averaging. My days of dollar-cost averaging are over. I'm protecting and interesting with a fixed amount with no new contributions.
Market was at a real high Dec 31, 2024. That's what the RMD's for the next year are based on. For 2025 retirees are having to take out a large RMD when their portfolio has taken a beating. This will have a negative effect for anyone taking RMDs this year.
So far I have lost two years of RMD income since the beginning of the year.
Yep. I feel for retirees drawing down on whatever retirement savings they have. If they had 200k to start the year, they just lost 10-20k of it, and the RMD is based on a high point at the end of last year. They are forced to sell more of their retirement to meet RMDs. I am just waiting for the smirk on his face when he cuts social security.
Limestone- you had me off guard at the opening line! I’m 62 and plan on working a long, long time and only take money out at my RMD. And yes I know all about the ‘tenets of asset allocation’ but bonds suck and have for many years! We have an inverse yield curve -or used to before inflation numbers- so I may dribble some into bonds now….but they too have been directly correlated to stocks over a few years.
FYI: 1) Direct Roth contribution can be withdrawn at anytime after contributed without early withdrawal penalty. 2)The earning from direct Roth contribution can be withdrawn at earliest qualified withdrawal date, which is at age 59.5, without early withdrawal penalty. If age requirement is not met, the amount withdrawn is subject to early withdrawal penalty of 10% of the earning from the withdrawn amount. 3) Each of the amount from each Roth conversion must stay in the Roth account for at least 5 years or else such withdrawal will be subject to the 10% early withdrawal penalty on the amount earned if made before 59.5, PLUS the earned amount will be taxed as ordinary income. There is no penalty for early withdrawal if the withdrawal is made on or after 59.5 yrs of age but the 5 years rules still apply for each Roth conversion regardless of age (e.g. still own tax on the earning any Roth conversion amount not met the 5-yr requirement even if you already in RMD age).
I’m not sure what other income I have that’s putting me in a 15% tax bracket in retirement but id be living off that income and I would let the $75k Roth account grow another 7 years at which point it is 150k after tax. Meanwhile my traditional account is down to 50k because of RMD.
It depends on the type of 457b. I think it is the non-governmental one that requires you to take a lump sum at RMD age.
I’m with you on this, it’s like a fire sale. My window is only 15 years until RMD’s kick in.
you could take the RMD and invest that money in dividend producing funds like PFF, PBDC, SPYI and others to get pasive income from the dividneds. If done in a taxable account you could gradually build up enough pasive income to cover all of your living expenses. I invested in funds like this to generate 50K of income a year. Enough to cover all of my living expenses and retired early. Many prefer bonds for pasive in come put teh yield is low so it is hard to get enough income to cover all your living expenses. With stock dividend you can get double to triple the yield at little to no additional risk Meaning you need less money to get significant passive income. Hopefully by age 60 I will have 100K of passive income. IF you have enough passive income you wouldn't need to liquidate shares to generate income. So your retirement fund could last longer
OK. I was confused when you started talking about the 10 year rule. In the case of the original owner dying prior to Jan 1, 2020, whether they were or weren't already taking RMDs doesn't matter. You're entitled to take them over your own life expectancy. If you want to verify your divisor, download the 2022 (or 2023 or 2024) version of IRS Publication 590-B. Go towards the end and find Table 1 - Single Life Expectancy For Beneficiaries. Find the age you attained on your birthday in 2020. That's your starting divisor. Subtract 1 to get the divisor for each year after that. So for 2025, it'll be the 2020 divisor minus 5. Given what you said about your current RMD amount and how long until your own retirement, I think it's a good idea to diversify. For the near future at least, your RMDs are a small enough % to where the performance of a decent portfolio should run well ahead of what you're required to take out. So your RMDs should go up pretty nicely, not just because your divisor is going down, but because the portfolio is going to grow more than the amount you're taking out.
He passed in 2019. If I look at Schwab's infographic on it, this means that the old rules apply. >The date you must begin taking RMDs is generally determined by whether the original account holder had reached age 70½ or their Required Beginning Date (RBD), which is April 1 of the year after the account holder reached, or would have reached,age 70½. If account holder was 70½ or older RMDs must start by December 31 of the year after death. If you don’t take RMDs when required, you may have to pay a 50% IRS penalty on the RMD amount. The amount of the RMD you must withdraw each year is typically based on your life expectancy andthe year-end value of your account. He was 76 at time of death, so I had to take RMD's the year following death, the amount of which is governed by the value of the account and my life expectancy. It's not like its an exceptionally large sum. I think the current value of the IRA is roughly 38k, and RMD's are roughly 750-950. I took out a couple thousand once to help pay for a new roof on the house.
I would continue with the RMD and pay down debt with RMD.
The 10 year rule is this way as I understand it: Beneficiaries must start taking RMDs the year after the original owner's death. Beneficiaries must continue taking RMDs annually until the account is empty by the end of year 10. There is an exemption you are likely thinking of if the original owner of the IRA died before -their- RMD date. In which case the inheritor can wait 10 years to draw down. That is not the case for me. Or at least this is what I was told by my advisor at the time. I do have a Roth IRA that I opened last year, yes.
I agree with those who say diversify it but keep to the RMD schedule for withdrawals. Unless you need the money for something, like to pay off a high-interest debt. Being able to stretch it across your life expectancy is great. It will cause less of a tax hit now, when you are in your prime earning years. And it will push some of it off to your retirement years when you will be paying a lower effective tax rate. And FXAIX is a good way to diversify.
It’s not too late. You’re more mature now and can max it out until you stop having earned income. You can build your IRA for later in life. With RMD in mind you can use your IRA for when you’re in your 70s. Or simply just have another nest egg. If you retire at 65 that’s still about 25 years of work and progress
Sell it all, reinvest in broad market index funds, and take your annual RMD each year. Don’t withdraw more than you need to.
Doh! Mistyped. I edited the post to correct it. RMD -- Required Minimum Distribution.
> I get confused with the required distribution vs 10 year rule vs 10% tax if I withdraw to move into brokerage or personal IRA/roth. As has been mentioned, you only have to take an RMD every year until the account is drawn down. Which will be like 80 years old. You pay income tax on whatever is distributed to you, and 10% is a penalty for early withdraw. This does not apply to you because it is an inherited IRA, not a regular IRA. You can take your distribution and put it in an IRA at any time, you just need to pay income tax on the distribution and meet the earned income requirements for contribution. So in summation, you only need to worry about RMDs, the other two do not apply to you with the inherited IRA.
Because of the age you stated, I'm going to assume your mother was not at an age where she was already required to take her own RMDs If she passed away in 2011 and you were a beneficiary: You are entitled to spread out RMDs over your life expectancy determined based on the age you attained on your birthday in 2012. So let's say you turned 18 in 2012. Download a copy of the 2012 IRS Publication 590-B. Refer to Table 1 - Single Life Expectancy (For Beneficiaries) on Page 93. Find Age 18. Your life expectancy was 65 in 2012, so in 2012, you were required to take 1/65th of what the value of the account was on 12/31/2011. 65 is referred to as "the divisor." Each year after that, you reduce the divisor by 1. So in 2013, you needed to take out 1/64th of the balance on the previous December 31. 2014, 1/63rd. Etc Etc. If we bring that up to the present, your divisor for 2025 is 51. You need to take out the value of the account on 12/31/2024 divided by 51. If the account was worth exactly $180,000 on 12/31/2024, your RMD for this year would be $3,529.41
It's RMD and Tax season. Give them a call and ask. But many of the paraplanners and advisors can get swamped right around now to April 15 with figured required minimum distributions and taxes. And so it's also a sign of how many clients they have and how slim their staff / team is
>>What would you invest in with the 10 year liquidation requirement? I assume that you are asking about investing within the IRA. There are of course many reasonable ways to approach this. I would ladder TIPS, each rung being an RMD/withdraw at maturity.
Invest the damn funds and just use the most beaten up shares of whatever you have to move the RMD in-kine from the IRA to a TOD or trust
The fact that you have to either take his RMD or basically create your own (take 1/10th the first year, 1/9th the second year, etc.) cramps your options. I think in that situation, I'd put 1/2 in SPY and 1/2 in a dividend ETF. If there's a year that's bad all the way through, at least the money the divs throw off will cushion the blow and reduce the amount you have to sell to reach the RMD.
OP said they would be required to take the RMD.
While likely, the RMD requirement is only true if the original owner had reached their required beginning date. Otherwise, the only requirement is emptying within 10 years.
I started RMD in 2011, so I'm not going to do some percentage return statement. It's just not worth the time. I will tell you, my wife of 48 years gets what she wants, my daughter is very comfortable and I'm paying for my granddaughter's MBA program at a private university. So I'm not really spending a lot of time analyzing net returns these days.
I never had an inherited, so do not know the legality of it. But depending on how much is in there, you should still be able to withdraw it and contribute it 100% into your 401k since I know know the limit there is quite high. 23500 for this year. If there is more in the IRA then that, can do it in parts. Would meet the RMD and still not have to pay taxes on it.
I use to do that analysis on a regular basis. My goal has always been to beat the S&P by 4%. I've done pretty well reaching that goal on a rolling 3 & 5 year basis. I will say once I started taking my RMD from my IRA's I haven't done the adjustments to do the calcs properly. I'm pretty comfortable with my portfolio performance.
>The rule was changed starting in 2025. Inherited IRA under the 10 year rule now have RMD’s annually and are still subject to the 10 year depletion rule. It’s more accurate to say the rule was **clarified** by the IRS in 2024. Starting in 2025, beneficiaries of Inherited IRAs where the **original owner** had reached their Required Beginning Date before death must take ongoing RMDs **and** deplete the account in 10-years. Beneficiaries of Inherited IRAs where the **original owner** had *not* reached their Required Beginning Date before death must only deplete the account in 10-years.
I will add you can take the RMD and close accounts as well to consolidate.
This is incorrect. The rule was changed starting in 2025. Inherited IRA under the 10 year rule now have RMD's annually. They are still subject to the 10 year year. [https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-beneficiary)
Well I have never worked at Fidelity, but when people don’t want to pay me, it is usually because they can get for cheaper at Fidelity lol. Yea. Robo is rough for people without even a login. And elder abuse regulations. For people just drawing down, I ask them to just get a family member involved. Tons of those clients are just legacy. The funny thing is they would be fine in self directed because they just set RMD and call it a day. But they will be pestered by KYC, having to log into account every once in a while to avoid abandoned property. It’s rough
Inherited IRAs of the same type and same decedent can have a shared RMD. By example, "Inherited Traditional IRA **#1 - Dad**" and "Inherited Traditional IRA **#2 - Dad**" can be viewed as a single account for RMD purposes. In contrast, "Inherited Traditional IRA **#1 - Dad**" and "Inherited Traditional IRA **#1 - Mom**" ***cannot*** be viewed as a single account for RMD purposes. You must compute the RMD for each respective account and distribute from each respective account as well. Note that for ease of tracking, you can perform a trustee-to-trustee transfer to consolidate all of the Inherited IRAs at a single brokerage firm. As mentioned, you still have to maintain separate accounts for Mom and Dad's Inherited IRAs, but at least everything is in one spot going forward.
Whaaa?? Then get that thing updated. I know they have plans like .5 including internals. With IRA switching is no big deal. Taxable can be more of a tax year process. But she likely has an old program style. If you don’t ask, they don’t offer. I mean for an old IRA, even moving to self directed and just helping with distros is fine. Or their robo advisor. All account types can have auto RMD. Managed services are for people building up and optimizing. Everyone should know what they are paying and WHY. Nothing wrong with having that discussion with the advisor. I like those convos. I also offer hey, move to self directed, I bet you cash out when the market turns, that one panic sell event normally justifies my fees for YEARS. But everyone should be looking for value. Even with a trusted ethical advisor. No client can offend me when it comes to discussing money. And any advisor that “clams up” on threats of leaving is a shit advisor in my opinion. I look forward to explaining why people pay for advice. Give the numerical example of what a bad choice looks like for them. 2022 makes it super easy to calculate.
I find it ironic, that the younger generation (largely Dem) will make it through the market dip without a huge hit as I hope the market will recover. However, those of retirement age (largely Rep.) will have their 401k's and other retirement effected and are in the process of RMD's. Bad timing to "shake up the government"
I assume they died after jan1 2020, sorry for your loss. To answer your question directly: you can take all RMD’s for all accounts from just one of the accounts. Let’s put it this way: if you have 5 inh IRA and RMD is 5k between all of them, Uncle Sam expects a 1099R with $5k at the end of the year, he doesn’t care from what firm. Now that being said. You don’t have RMD’s, it just needs to be done in 10 years of you will be penalized heavily. RMD’s are for death prior to 2020, 10 year rule is after 2020. You should probably find a good advisor or tax pro or both. Good luck.
You can take the collective RMD in any manner you want as long as the registrations are the same. Traditional IRAs can be aggregated. Roth is separate. If your parents left you an inherited IRA that they got from someone else that will have its own designated RMD As long as they were all traditional IRAs you'll have RMD for Mom's designated accounts and another for Dad's designated accounts. I don't believe you can take a portion of Mom's RMD from Dad's or vice versa
Yeah I found on the Vanguard website where I can opt in to the auto RMD. (For some reason, it's not an option on the mobile app.) I didn't realize we needed to do that since they were doing it automatically for the first two years. Thanks for the divisors! What are your thoughts on brokerage vs ROTH IRA? I know conventional wisdom and common advice would be to use the RMD to max out a ROTH. We could even max out one for each of us. But if we wanted to retire early (don't currently have a target year just seems very possible) I think it would make sense to keep at least some, if not all, of the RMD in a brokerage account. Our current income being ~$60k together, our expenses are low enough that the amount we would need to live on would not exceed the 0% long term capital gains tax bracket. So it would be like pulling from a Roth IRA without an early withdrawal penalty. But with a roughly $100k cap, or else taxes.
That should definitely grow more than RMD’s. Find a trusted advisor that knows about deceased transition (most don’t). Make sure they have a solid plan for how you will use RMD’s into ROTH and then brokerage. Never too late to learn to sell! Knowing you have a nice nest egg takes a lot of the pressure off. Sorry to hear about your dad. Best of luck!!
Using the RMD to convert to Roth will incur just as much tax each year as doing anything else with it, so I support the idea. Contributions (not gains) in a Roth can be removed at any time. It's not recommended to do so as it will set your retirement goals back. I've never done that with a Roth, not sure how to document it. As you open a new account, you indicate it's a Roth IRA at that time. This is for a US person in the US, anyway. I'm a big fan of opening a taxable brokerage and starting to invest in it. Low dividend index ETF, VOO would do nicely. Avoid anything paying an unqualified (fully taxed) dividend as those are taxed at income level not LTCG.
Well it changes daily, obviously, but right now it's around $940k. It does seem to grow faster than the RMD can bring it down but the last couple years have been... You know. So the gains may not always be larger than the RMD. You are correct, we currently do not have any ROTH accounts. I didn't know we could open one. 😅 But we do have a brokerage account that I put money in every week. I may want to start at least one ROTH but I'm thinking if we want to retire early it would make sense to keep at least some in a brokerage account too. Long term capital gains on what we would need to live on would be 0% so it would still allow us tax free growth but also allow us to withdraw early (before 59½) if we need to. What are your thoughts?
Yeah it's currently with vanguard and I have most of the money in VOO. A small portion is in a few individual stocks. Is there anything that would stop us from being able to open a ROTH IRA? I'm not familiar with the laws on ROTH accounts but I thought not just anyone could open one. With the RMD we could easily max out a ROTH each year. Two if we wanted to. Could open one for each of us. But my concern is not being able to draw from it until we're 59½. If we wanted to retire earlier than that, I think it would make sense to keep at least some of it in a brokerage account. Our income and expenses are low enough that our long term capital gains tax would be 0% so it would be like pulling from a ROTH account without penalty. What are your thoughts?