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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
My health insurance is up nearly 50% in the last five years. I’m sick of subsidizing the ACA. Why do we always get stuck paying the bill? The lower class pay no income taxes and basically get discounts and subsidies on everything from food to their utilities bills. The wealthy well they don’t really have to pay for anything as they don’t really have income therefore they basically pay taxes out of their RMD’s. This healthcare nonsense has to end. Stop making us pay the health bill for the obese McDonalds eaters who don’t take of themselves and scream “Free Free Free gimme everything for Free!”
Yes but if you manage the mix properly your 401k RMD might below your spending needs
RMD age will be 75 years old if you’re born after 1960
There are two ways to get income in retirment. sell shares. Or invest for income. If you are selling shares you want to sell from the account that has the highest future teax liability. When you are talking about 401K and ROTH there is zero tax liability in the Roth. For the 401K you have Required minimum distributions (RMD) which is the government mandating you sell a certain amount regardless of you need for the the money. Which is in effect a mandatory tax. For taxable brokerage account all activity in the account is taxed each year. With 401K and Roth there is no tax on activity in the account. SO you do the following: 1. Sell from the taxable account first to minimize yearly capital gains or dividend taxes. 2. Sell from the 401K so that you minimize the RMD later in life. When you liquidated the taxable and 401K all that is left is the roth which is not taxed. on activity in the account or withdrawals. Either way with the liquidation rout there is a chance that you willl run out of money before you die. So you have to manage your withdrawal rate every year to insure you don't run out of money and become homeless with no medical care. Now as i mentioned aarlier there is a second aproach which is to invest for income. government and corperate bonds and dividend from funds or companies deposit money monthly or quarterly. And you are not selling anything. So in theory you will never run out of income. And if you select good investments the market could crash like it did in 2008 and 1930 and still get income. The Book The Income Factory is a good guid on this investment style. Armchair income on you tube is a good supplement to this by reviewing funds that can be used to build a income factory.
This is really a tax simulation. First, you have to decide whether you want to minimize taxes during your lifetime or minimize taxes for your combined lifetime and heirs. Second, you need to think of taxes during RMD phase since that's the time you will potentially have the highest income. For example, if you are 50 right now with 1 million pre-tax and live off taxable accounts to achieve 0% tax early in your retirement, then by the age of 73, your pre-tax could be 5 million. The RMDs would be significant and put you in a high tax bracket plus you will be subject to IRMAA. Between the time you retire and the time you start withdrawing SS will be a key time. This is a time where you could potentially have the lowest taxes. It most likely will not be optimal to target 0% taxes. You're going to want to fill out the lower income tax brackets. At least fill out 12% income tax bracket with Roth conversions. There was a time when ACA subsidies were significant but as of 2026, the ACA subsidies are small relative to your assets. It would require you to keep your income super low. The opportunity cost of achieving ACA subsidy would be that you would be giving up the lower income tax brackets. I have done simulations similar (but with 2 million in pre-tax) to what you are suggesting and it would be better to do Roth conversions than to attempt to get ACA subsidies. There are a lot of details you need so I recommend you run the numbers yourself.
Depends on each retiree’s particular case. For me, it makes sense to withdraw from Traditional 401k first in order to cover living costs and reduce future RMD size.
Factors you want to consider which ultimately leads to “what’s my tax rate if I do xyz?” - how much income are you expecting? If you have other sources then maybe that will be enough - what’s your tax bracket? If your tax bracket is low then you want to consider start converting your 401K to Roth slowly. - you’re paying the income tax now rather than getting caught with a RMD at 70 with a big ass forced withdrawal - if you have 1M now and you’re what? 50? That’s could get to 2 or 3? Then your first RMD maybe be like 80K for the first year. - Roth is usually the last account you want to touch. So Brokerage to use, 401K to convert if you have capacity, then finally Roth
> I do not plan on taking out while working but on retirement being in a lower tax bracket You have that freedom with *your* IRA, like one that you have opened yourself, but *not* with an IRA that you inherit. There are some exceptions to this, but most likely, if you inherit someone's IRA you have 10 years to cash it out completely. If RMD's have kicked in (starts when the original owner is in their mid 70's) then you are also forced to take *at least* a specific amount every year. That is my current situation; I inherited an IRA last year, have a minimum I need to cash out every year, and 10 years total to cash it all out. Given that every time you take a withdrawal it adds to your ordinary taxable income for year (i.e. on top of a job you already have), it's very easy for tax brackets to creep up, and between federal and state 20-30%+ can go to taxes. This is where Roth IRA conversions are worth considering, as when you inherit one of those there is no tax burden as you cash it out. You may want to consider talking with a financial professional about all these possible outcomes. Or more so, your mom should, since it's ultimately only a decision she can make about her accounts and finances.
Don't have it yet, but I expect to receive a sizeable inheritance in the next few months. It's enough for me to live moderately comfortably for 5+ years in a LCOL area. Similar portfolio value. Plan is to retire early and live off the cash/interest while doing Roth conversions up to the 12% bucket, maybe even the 22% bucket. Will delay SS for a few years to maximize the dollars that I can convert at the lowest marginal rates. With any luck, I'll be able to live exclusively off SS and a small pension indefinitely. Once I hit RMD age, will probably transfer most of the withdrawals to my heirs or put it in brokerage accounts for their eventual inheritance/retirement. Will depend on how well they are able to manage money in their 20's and 30's. Will reevaluate my plan every year.
Just did this for my grandfather. We recorded all stocks and prices at the time of his death. Then we sent proof of death to his brokerage along with the will and my dad’s proof of being the executor of that will. The money was split between a normal brokerage and a IRA, the money was split up according to the will and transferred to the beneficiaries in their preferred way. Some wanted it liquidated, some wanted the stocks with a step up in basis. They were able to keep their amounts that were in the IRA in an IRA but they instantly had RMD’s they’ll be paying out for the next 10 years.
i put as much as I can into my Roth 401k because of Required Minimum Distributions (RMD) that applies to regular 401ks. I just put the company match amount into my regular 401k, and the rest into roth.
So I just spend a few nights running through a Roth and trad analysis. We went a little deep than conventional wisdom on it (tax rate now vs when you retire) and went well deeper into late retirement and estate. My advice is get out and excel sheet and work out the scenarios because it’s more complicated than “I’m retiring at 65”. Since you have 1M in pretax, you may have similar assumptions variables as I had. High levels: - everything you already heard to death. Traditional (calling it T) pay taxes at distribution as income. Roth (R) pay tax at current rate and gains tax free - R is tax free and not subjected to distribution rules after 65 - T there is an RMD to consider at 73 (75 after 2033) - additional variable to consider “how much is my pretax lump sum 10 years after retirement” - current rate is about 1/24 of your lump sum to be distributed 75 - if you’re in a scenarios of accumulating to 65 then modest retirement withdraw until RMD then you could be looking at a pretty high tax bracket. - there’s an additional benefit to consider then which is Roth is not subjected to rmd and there are benefits to convert at the RIGHT TIME…if you’re in a period of reduced income then you can do a conversion at a lower tax bracket. Basically it means you need to do in-depth research or seek some consultation and plan it out because….its actually pretty complicated…you’re in the mo money category now.
Since you don’t need the RMD, maybe think about doing a Roth conversion to lower future RMDs + taxes. You could also pay off your mortgage early or put it into low-risk stuff like Treasury bonds if you’re not into risk. I’ve been using the services from [https://q3adv.com/](https://q3adv.com/) for retirement planning. It helped me with tax strategies like Roth conversions. Check it out if you want
Since you don’t need the RMD, maybe think about doing a Roth conversion to lower future RMDs + taxes. You could also pay off your mortgage early or put it into low-risk stuff like Treasury bonds if you’re not into risk. I’ve been using the services from [https://q3adv.com/](https://q3adv.com/) for retirement planning. It helped me with tax strategies like Roth conversions. Check it out if you want
Question. I inherited a stellar portfolio held in IRA's. Since I need to start my RMD's this year I have to either sell and choose what to do with the cash, or do an in-kind transfer. Since the in-kind transfer resets the cost basis anyway, would I not be more or less "buying (back) in" at the top? The total value of my assets are more or less the equivalent of a solid but conservative retirement fund and I am not far from retirement age so of course I am seriously concerned about a significant downturn. On the other hand, for the same reason I'd like to keep a return coming. Any suggestions.
you can find a fee for service fiduciary. i pay 8k per year. she is a cpa, and does financial planning. meets about 4 times per year. i am newly retired <1 yr. big issue for me was to reduce taxation from RMD's . wanted a second set of eyes on doing a back door ROTH.
My father passed spring 2020 so yea I am required to RMD. The first couple years I didn’t but in 2024 I played catchup and took 4 years at once which resulted in owing lot of taxes.
>I don't want to pay extra taxes in the next 10 years on anything I gain there. Forget everything else and focus on this statement here. What do you mean by this. Let me give you a concrete example. You have $100k in it and you invest it into *anything* you want. By the time you have to take RMD, two scenarios can happen: one, it stays at $100k. two, it grows to $200k. What do you think is better? This is a purely math question. Which do you think is more, $100k after taxes or $200k after taxes?
Default security sales are usually First In First Out. So assuming you held 100 shares of a stock that you bought 10 a year of, over 10 years, the securities bought in year one would sell First. This can normally be changed however. If you're trying to avoid realizing too many taxable gains, Last In First Out would sell the securities purchased in year 10 First. Assuming the stocks appreciated more over time, you can recoup your capital and minimize your tax bill this way. The IRA should follow a 10 year RMD rule if you're a qualified beneficiary. If you inherited it this year, for example, you have to pay income tax on all the proceeds (earnings and principal) and you must withdrawal everything by 12/31 of 2035. Where it is invested is dependent on your risk tolerance, but you may want to plan out withdrawals over the next decade so that it doesn't impact your tax bill adversely in the last year.
Use a bucket approach: lock in 10–15 years of withdrawals with safe ladders, keep the rest in a balanced stock sleeve for growth. Math check: $24k from $420k is \~5.7%; for a 15‑year runway that’s workable if you time-segment. I’d do 2 years in T‑Bills/HYSA (\~$48k), a 5‑year Treasury/TIPS ladder for years 3–7 (\~$120k), and years 8–15 in intermediate Treasuries or a small period‑certain SPIA/MYGA (\~$168k). Put the remaining \~20–25% in a broad stock index (US total market + some international). Spend from cash, roll the ladder annually, and only refill from stocks in good years; in bad years, refill from bonds. This cuts sequence‑of‑returns risk while still letting a growth sleeve compound. Mind the 457 tax angle (likely no early penalty, but withhold taxes), and revisit the mix yearly so RMD timing at 73 doesn’t blindside you. I’ve used Vanguard LifeStrategy Income for the growth sleeve and Schwab’s CD/Treasury ladder tools for years 1–10; added a small MYGA via [gainbridge.io](http://gainbridge.io) to lock a fixed rate for years 11–15. Bottom line: match the first decade-plus with safe ladders/MYGA and keep a \~40/60-ish stock/bond sleeve to grow the rest while pulling $24k.
Look into the possibility of incremental Roth conversions, especially for this year and next few years while staying at lower tax bracket. With that much in those 2 stocks, I think you need to prepare for a hugh tax bill comes RMD age, high Medicare IRMAA (medicare surcharges for Part B and Part D), taxes on 85% of your SS benefit amount especially beginning with your RMD age.
I have my mom taking her RMD's and putting them in her brokerage account because she doesn't need the money, but has to take it out. After that, I do a Roth conversion up to the point of where going over a certain amount would result in taxes. She doesn't have a lot of money saved, but her SS check is enough because she didn't claim SS until she was 70. That's the only thing keeping her out of the poor house besides living with me. I'm just making sure she keeps what she has and if she doesn't need it, then my siblings and I can inherit it. I do remind her that she has some money and that she should enjoy it first. The rest of us will be fine, so I'm not trying to grab an inheritance from under anyone. I might be able to get her to finally spend some of it on herself this year too. That will be good for her.
I had one lucky period of time from 1994 to 2000 where I had 90% of our portfolio in one stock that went up 100 times. That resulted in a strong base to grow from for the next twenty years to retirement. In 2000, I switched to commodities like oil, natural gas, electricity, gold and silver and rode those for a while. We retired in 2000 (I was 61) and have the problem of how much to convert from non-taxable to taxable before RMDs. One of the issues is that Social Security covers most of our living expenses and we need to convert several times that per year to avoid huge RMDs whenever the RMD age hits. It is also difficult to spend your money when you've been frugal all your life.
True. Our pensions more then covers our expenses and some extra travel. Wife (65) will begin SSA soon which will be some extra funds to do more traveling We do still have about $300,000 in treasuries in a taxable account That can easily last us 10 years or more. Wife just bought her a Lexus ES350 so we used some. 😂 We are converting my wife‘s tax deferred monies ($600,00) now but only adding to the max 12% tax bracket. During RMD’s we will be in 22% tax bracket so not much benefit to go over 12% now. I‘ll roll mine into a rollover IRA as soon as I can To get it out of empowers hands and convert some as It fits into the tax bracket However we will concentrate on hers first since her RMDS start sooner then mine
single best way to reduce RMD taxation when you are 73+ if it lasts...
Starting RMD next year. Created bucket of cash & short term bonds for 3 years of RMDs and over all 60/40 as usual.
The big factor here is the rules on inherited IRAs and not about moving the market. You’ll have required distributions, which means you can’t just let it sit forever. Selling everything now locks in today’s price, but knowing your RMD schedule helps you plan instead of rushing. Maybe have your custodian walk you through what that looks like.
If they are in a retirement account then you don't have to worry about gains. Keep the proceeds within the retirement account. If they are in a taxable account, compute capital gains and liquidate over a number of years to stay in the tax bracket your targeting. Probably the 15% bracket. Keep in mind if your inheriting retirement accounts and your not a minor, then you probably have to fully withdraw those in 10 years. Roth is no problem you could wait until near the end and remove most of the assets, but an IRA, you'll need to divide the assets over those years and make quite large withdrawals each year. To levelize your income tax bracket. Keep in mind both Roths and Traditional IRAs may have RMD requirements on inherited funds. So learn what those are.
Correct. Roll to an IRA, and I would be rolling to a Roth up to the tax bracket amount for the AGI. My 401k has a Roth option, so hopefully you have some of that in a Roth. OP needs to look at taxes, and what the RMD will eventually do.
Your plan seems sensible. If it were me, I would figure some cap on the 25% you are keeping in second HYSA account. Once that cap was met, I would maintain the ratio on the other two destinations, i.e. 66% VTI and 33% to your individual stocks. Regarding your individual stocks, I too keep a few stocks outside my main plain, i.e. SP500 index, direct indexing, etc. The amount in individual stocks is not a fixed percentage but a number that I Am happy with. If you are finding your varying risk portfolio is keeping up with VTI, I would keep up the monthly percentage. If not, or if you get bored with playing around with those stocks, reduce the exposure to that portfolio group and increase the VTI portion. Regarding the 3 month check, this is something I have never encountered as I have always been self employed and have never received a paycheck. You can look at this one way... You save $4k/month - does not matter what your income is, or if the $4K simply income-expenses = savings, then feed the 3rd paycheck into savings. As you are asking this in an investment forum, I suggest run the extra check directly into your savings plan. Good luck with your financil plans. Only in retrospect is there a "correct" move. Some seem sensible, some seem foolish. Your's certainly seems sensible. You don't mention your retirement savings or plans. Project out your RMD requirements and make sure you don't force yourself into an obscene tax bracket. - There is a piece of unsolicited advice. One I wish I had received many years ago. Art
The 401k isn’t forcing her to rollover? There must be high fees to justify this. That is robbing next generations of wealth. 400k cash, then conservative portfolio’s: why?? She is obviously just taking RMD’s. Will likely never spend the Roth. Move the Roth to sp500 at the very least. Make sure all the beneficiaries are set up. Make sure the deed on the house bypasses probate. Way under invested. No big deal for her, she is obviously living well beneath her means. Just shorting her heirs though.
1) What is the nature of their relationship with ResMed? *(A lot of people have been speculating on some kind of $RMD buyout or partnership in the future. This can cause more harm than good in the long run if people start investing with unrealistic expectations.)* 2) Status update on $20M share buyback program? Also, how can they can afford to do this with multiple drugs in the FDA approval and clinical development pipeline? *(If the company set this up with no plans to act on it in the near future, they should let their investors know.)* 3) Did they apply for the Commissioner’s National Priority Voucher Pilot (CNPV) Program? *(Any indication they at least looked into it is a good one.)* 4) How does Incannex Healthcare, Inc., anticipate handling manufacturing or distributing their products upon approval? *(Long-term planning question.)*
There are a lot you need to learn. Stepped up basis, RMD of your parents' IRAs, index funds. All the reading material is right there on the sidebar.
I’m in this boat right now. I decided to take the initial amount and divide by 120 months. This is a bit more than the RMD but provides a nice monthly income. I’ve taken 6 months out and the Ira has still grown 50000 on top of what I’ve taken out. May readjust next year because the 10th year you don’t want to have a giant amount to pull out due to taxes, remember that it’s taxed as income so look at your tax bracket to make a decision. Good luck!
Ask chat gpt - actually really helpful with these kind of questions. I would stick with Merril - they are solid and will put you in good investments. You will probably want to ask them if you should withdraw the RMD amount years 1-9 and then year 10 all the rest (good for growth, but probably put you in a higher cap gains tax bracket for that last year) or just withdraw 1/10th every year to spread tax liability - the answer to this depends on specifics related to your situation (age, income, etc).
You're welcome. ML may be pushy because they want the issue resolved and if there is an RMD then they want that handled. It is a big tax penalty to you if you miss your RMD. Pick whatever broker you want and get it set up as soon as you can. They will liquidate all positions and deliver cash to your new inherited IRA. If there is an RMD due to you they will send you those funds separately.
Be aware that the RMD rules for inherited IRAs have been a bit of a mess. Information from the Internet may be out of date.
You should look up eligible designated beneficiary. If any of the rules apply to you, then you may not have to do a 10 year withdrawal period and would be a life expectancy based off your age for RMD. The rules are quite complex with the secure act 2.0 so I always suggest a tax advisor.
OP does not have 10 years. The rule states the Inherited IRA must be empty after 10 years but you are still required to take RMDs the entire time. Furthermore, if the mother had an RMD to take and didn't yet, then OP needs to take that before the end of the year.
Eh. Many won’t liquidate until RMD’s kick in.
Peak year of births was 1957, so those folks are about 68, average retirement age is 62, most stocks and bonds are held by a small percentage of wealthy people, so while there might be a slight increase in individuals selling when their RMD‘s commence at age 73, the first year is only about 3.7% of their balance.
- EJ is all over the US. - the the statement’s fund balances are listed in $ not £. - RMD is an IRS rule governing IRAs.
I agree with people who say that's too many holdings. I would see if TRP can automatically construct RMD's on a basis proportional to the holdings. ie. RMD for the period is $X Fund A currently is 10% of the portfolio, liquidate enough of it to make up 10% of the distribution. Etc, etc. If TRP can't do that auomatically, I'd calculate it myself. I wouldn't want to be in a position to decide to liquidate all of one fund before another, although if forced to, I'd probably liquidate a bunch of the smallest positions first, which will effectively do some consolidating for you.
unless you have education in finance, or professional experience managing money, IMO don't give this advice to your mother. She's paying Edward Jones, so she needs to talk to them or another professional for RMD advice. >First question: Why so many bond funds? What’s the advantage? if she's old enough to need RMDs, a bond-heavy conservative portfolio is probably appropriate. However, that portfolio looks like a mess. She probably needs to consider consolidating to maybe 3-6 funds at the most. Even a single fund might be OK, such as the Vanguard Wellsely income fund VWINX, the Wellington Fund or the Dodge & Cox Balanced Fund DODBX. She needs some stocks, maybe 20-50% depending on the overall financial outlook. If she's in good health, she could live decades and needs growth to keep up with inflation. But a basic conservative US low-volatility or dividend fund, and maybe a similar international fund, is probably adequate. Possibly a real estate stock fund. She needs a few bond funds, but not that many. A basic aggregate bond fund, inflation adjusted bonds, maybe a short-term income fund as well.
Good questions. Traditional versus Roth IRA largely comes down to when the taxes are paid when the money goes in. Roth IRA contributions are after-tax, so when you withdraw that money in the future it is tax free, including all the growth! Traditional IRA contributions are (usually, not always) tax-deductible when you contribute. Which is great as a tax break, but since that money hasn't been taxed, you will pay taxes on it, at ordinary income rates, when you withdraw from it in retirement. You're also at some point *forced* to take minimum required distributions (RMD's) from traditional IRAs. And if someone inherits your IRA during their prime working years, since it's on top of their job income the tax brackets can go up and a lot goes back to the government. > I am also confused about is why does this particular IRA have a 1% maintenance fee but my Roth IRA only has a $50 a year maintenance fee? First, for awareness: You can move both of these accounts to a different brokerage, like Fidelity, and pay *zero* maintenance fees. In your situation I'm guessing that your Roth IRA is totally self-directed? I.e. you buy and sell whatever you want in it. Since you're doing all the work, it's just a fee to have the account open (though again, there are brokerages where you don't have to pay a dime for this). What it sounds like your financial advisor is proposing is for your Traditional IRA to be professionally managed, in other words, "If you let us take 1% a year we'll handle all the buying and selling of assets in this account for you; it will not be self-directed." Again, you can have a Traditional IRA at a brokerage where there's none of this and you can decide how you want the money allocated. Alternatively, a middle-ground solution is what's known as a "robo-advisor" where a set of automatic rules manages the account as a function of your risk tolerance and goals. Fees for that are usually half a percent ish. > What if another account has a cheaper maintenance fee, or a flat fee, but the annual return is 7 or 8%? There's really nothing about *the account* itself that determines the annual return; that's a question of what you choose to invest in with the money in the account.
When I need to withdraw my RMD I sell my less performing investments until I reach the TMD amount.
Why are you still working? How long do you expect to work? The reason I ask this is because you are very worried about taxes and are running into your RMD years which are going to complicate your tax strategy. You may be trading your time for very little extra money in the end. Just something to consider. I would talk to a CFP that specializes in retirement and estate planning.
You sound like my sister I had been financially advising. Between her pension, SS & TIRA RMD, she's going to be in the 32% bracket, so she needs to do as much culling of her TIRA as possible at 24% to knock that amount down.
During earning years with W2 income, you actually had less flexibility in tax planning. A high W2 income puts you in a higher bracket. After retirement, I have a lot more flexibility in picking the bracket I want. To answer your question, you don't convert it all at once. You pick the bracket you want depending on your tax planning. Balancing expenses, RMD control, and eventually IRMAA brackets for Medicare. For tax year 2025, the ceiling for 0% long-term capital gains tax is $48,350 of taxable income for a single person, and $96,700 for a married couple filing jointly. You can knock off a big chunk every year if you can control income.
IRA is taxed at income rate. You potentially pay even more taxes in an IRA account at long term capital gain rate. Roth is tax free. IRA is best invested in fixed income. Also plan for Roth conversion to control RMD.
I don't think so, but I could see a total balance limit set or an RMD on roth accounts. However, that will also be at the same time we lose step-up in cost basis as death.
I feel Roth will be the last thing they touch. I am super heavy in deferred and at 58 I am doing some large conversions out of my IRAs into a Roth. I have a multi year plan to roll up to the 24% tax bracket for several years. Several factors pushed me into it...but thinking the Roth is the most untouchable tax wise is one of them. No RMD, and also as inheritance it doesn't cause tax issues for my kids.
You don't need to. All that matters is the distributions and RMD's that exit the account gets taxed. That's why they're called tax advantage accounts.
Fall of 2008(62) -2014? bought a series of GLWB annuities with IRA monies.. Totalled about 75% of IRAs. About 10-25% of net wealth, Since it was IRA monies, we substituted future RMD with a known algorithm future withdrawal.... IOW we bought pseudo pensions with IRAs that had better features but involved substantial fees. Some of these Annuities functioned as a "collar" with a loose upside cap on stocks, Some of the annuities collared interest rates. Todays' annuities of this type put more risk on the buyer at higher fees. We retained management of 401k ->IRA, Roths,, debt free home, and investment property. I built a risk pyramid,; A multi income streams; hierarchical income/wealth. The advisory firm only receives fees on what monies they manage. The advisory provided certain specialized financial products that were difficult for me to learn, execute and monitor.
Move RMD over to brokerage account each year. Keep building on what you have.
Don't worry about RMD's until you get way closer to that time and then plan those (20? years from now?)
Mid 40s here. 1.8M Tax advantaged (IRA/Roth/HSA/Solo401k/529), 850k Taxable brokerage, 460k real estate equity (primary home). I've done a lot of work along the way in this, but have mostly ever maxed out tax advantaged. I was always in the 22/24% brackets, touching into the 32% even in one job. When you are in those brackets it almost always makes sense to do pre-tax, as it comes off the top of the marginal bracket. I also did Roth early on or anytime my salary allowed for it. Anything remaining falls into taxable. When I was a contractor (1099) for a few years, I used an S-Corp, and was able to divert substantial amounts to my solo-401k, beyond the individual contribution limit, and did that. I was otherwise in the 32% bracket there. Btw, finding and taking as many legit business deductions as you can is always better than tax advantaged. Over-did? This one is something I recently started thinking about. First off, many people argue that you should go for 401k only up to match, and otherwise all Roth, that rates will be higher in future. I think that's tough to predict. But I disagree, because it also overlooks the fundamental point that taxation in retirement still requires you to "fill up" the brackets until you reach the pre-tax marginal bracket you deferred at. So if your 401k avoided even the 22% bracket, you'd have fill-up income to $48,476 (2025 bracket) before your retirement income got there. Even then, your average retirement tax rate is far lower than 22%. For your average retirement rate to reach 22%, the yearly RMD is much higher. I've got a table though, and it's in the range of $3.5-4M, withdrawn evenly over 25 years, that your average retirement rate gets toward 25%. This assumes a bit of Social Security, a standard deduction, and adjusts brackets for inflation. I never expected that to be an issue, always aimed at an aspirational $2-2.5M retirement goal. Now I'm mid 40's. Compound growth does wonders, basically a slow and steady exponential curve over many years. Average growth rates are often more than you expect. It's likely by retirement that I could get into that $3.5-4M pre-tax range, possibly beyond. At that point, **taking RMD will have me in a higher average tax rate than the contribution deferred rate.** Currently I'm not working since my last recent job ended, somewhat involuntarily with the job market. But I'm experiencing a couple things about low income brackets. The big one is that long term capital gains rate (LTCG) on taxable brokerage accounts is 0% up to a sizable threshold. Qualified dividends are also 0% rate. I've got about $450k of gains on my taxable account I can work down at 0%, until I choose to work or until I'm 59.5 and can opt to start drawing the IRA for tax optimization. Also, regular income has a decent threshold to pass before it even gets taxed, and a bit more is only taxed at 10/12%. I've been doing IRA->Roth conversions at this low rate to reduce my IRA balance. **It still won't be enough avoid 22%+ average retirement rate though**. Unfortunately, navigating health insurance subsidies creates an opposing income wall, and a huge subsidy cliff I come up against also. Along this path, to reduce taxable income and allow more IRA->Conversions, etc, I've taken to reduce taxable activity on my brokerage. If I sell stocks to realize the 0% LTCG, I target the ones that have high dividend payments. I've started using SGOV over cash for some minor optimization. And, I now only trade my options in my tax-advantaged accounts to avoid having unexpected short term gain bursts. **TDLR**, Summary: You can contribute too much to the generally preferred pre-tax retirement, that it grows to a level that it puts you in a higher average tax rate than your contribution rate. And this is hard to undo once the compound growth trajectory is locked in.
How do you know? What will your income be after retirement? Will RMDs and SS push you into the next bracket? What if you have a windfall? What if your investments experience incredible growth? That’s all taxed. Or, just pay tax on it now, no RMD, no taxed growth, withdrawals are not counted as income.
Enough for 5 years, treasuries. I live on my RMD plus social security. I made the change in April when the market was swooning. I retired 5 years ago but had never rebalanced. So now I can sleep and the market has recovered. Now if it will just stay still…
I also have a recent Inherited IRA. I'm familiar with RMDs, but how do you know how much the RMD withdrawals from the inherited IRA should be? The IRS RMD tables (where you get a divisor based on age) start at age 73 I believe, and im much younger than that. Do I just use the age the person was who I inherited the IRA from, even though he is deceased? ??? Any help appreciated.
I understand your question because I’m in almost the exact same boat. You have to take the Required Minimum Distribution every year for the next ten years from the inherited IRA and are wondering how to leverage this annual cash influx to benefit your kids. I just got the first RMD check from the IRA I inherited. That check was enough after I set some aside for taxes to fund a year of college expenses for my senior who is starting college in 2026. I have a 529 plan for my child that has enough to cover 3 years of her annual college expenses (tuition + dorm/living expenses). I am considering using the RMD check I got to cover her first year to give the 529 a little more time to grow, and am considering using the RMD cash to buy some laddered CDs that will mature as I need them for semester 1 expenses then semester 2 expenses next year. Also putting the rest in my Schwab account. I guess the wildcard is knowing how much you’re planning on spending for college for each kid and adjusting accordingly. I have been very clear with my child what the budget was going to be and saved in the 529 against that goal. So I have a pretty clear idea what I have left to cover. Good luck to you!!
This is actually a really interesting point. If 401(k) plans ever became net sellers—whether due to RMD rules kicking in or a large wave of older investors cashing out—it could create steady sell pressure in the market. And if that happens during a period of economic stress or low liquidity, the impact could be amplified. Pair that with potential short selling from big players targeting the same securities, and you’ve got the recipe for a sharper drop that might even trigger panic selling from those close to 59.5. The question then becomes—do trading bots and institutional dip buyers step in fast enough to stabilize things, or does it snowball before they react?
RMD wave gonna make 2008 look like a warm-up.
So you’re saying the final boss of the market is grandpa’s RMD?
Is the OP using his brain in the room with us? This post has so many false assumptions like RMDs (which can easily be avoided) being significant. Most retirement accounts will not be affected by RMD because they are poor like OP. Another terrible assumption is that when money is withdrawn it just disappears from the economy into some black hole.
**My take on the 4% rule is that cash should absolutely be part of your strategy in retirement.** I know that might get some pushback, but in this current rate environment, you can get a solid fixed return on cash — especially through MYGAs (multi-year guaranteed annuities). I’m in the process of restructuring my in-laws’ retirement accounts, and we’re building a plan that includes fixed annuities, money market funds, and a gradual reentry into the market. They’re entering RMD age and will be pulling around $40K per year, just like your example. They have about $700K in cash equivalents. I’ve already locked in $280K into MYGAs with rates between 5.6% and 6.2%, staggered across 5- to 10-year terms. When those mature, they’ll be worth about $455K and that’s a guaranteed floor, not a market bet. In my view, too many retirees stay overly aggressive when they’re no longer in the accumulation phase. Retirement is about controlled consumption and preservation, not just chasing returns. Having a portion of your portfolio in fixed-rate products that are working and compounding quietly in the background gives you flexibility and peace of mind. So to your question no, I don’t think the full $1 million needs to be invested in the market at all times to follow the 4% rule. What matters is having a reliable plan for producing that income, and sometimes that means stepping out of the market when the risk/reward isn't in your favor.
I have $0.12 in my Fidelity 401k. Every year I get the "no RMD needed" letter.
I'm no longer in IXHL, but I wouldn't be surprised if Resmed is forcing their hand. Resmed is still, at this time a competitor and number one in the sleep apnea field (CPAP is there business). Unless Resmed hints at getting into oral medications, it's only wishful thinking. It surprised me like everyone else, on what I would consider spectacular Phase 2 Topline results, for it to plummet in such a way. I've seen companies announce reverse splits and bankruptcy do better. Something smells fishy with the whole thing. (Is RMD shorting or holding it down, so they can buy out their competitor?)
Partnering/getting acquired by RMD
Some people are hoping some sort of announcement of partnership between IXHL & RMD. It's all rumours as of now & quite frankly hopium from IXHL holders which I am one of them.
Now buy back is only option to get in before RMD earning report after hour
If they can not compete with IXHL then buyout will be a perfect choice for both. Look at RMD stock price went up nearly 17% in 3 months.
The CEO of IXHL did pointedly mention partnerships in today's news. It's not unreasonable to see RMD as that partnership. Question is buyout, investment or license?
I know RMD is being seen as a partner but IXHL having these kind of ground breaking results is actually a huge threat to RMD current dominate market share of CPAP machines if that doesn't happen... the ball is in IXHL's court.
$RMD whats up??? That's my next thought now that phase 2 data out
the 4% rule doesnt take into account RMD (required minimum distributions). For me if i am lucky enough to hit that age the RMD will mandate more aggressive withdrawals/taxes--which in turn begets even more withdrawals/taxes... its quite a quagmire.. im hoping to deflate my IRA wit h a ROTH conversion, however part of the "big beautiful bill" includes asking congress to look at mandating RMDs with ROTHS....
It’s unlikely someone earning $100k+ will get bit later by minimum distributions. If someone reads this and thinks okay, let me switch to investing in Roth, they will pay taxes on it now at their marginal rate which is currently 22%. The amount of money needed for a RMD such that it’s effective tax rate becomes at parity with the 22% is almost $250k. This amounts to OPs retirement account needing to be at almost $7M when they reach age 70. Now, for someone earning $100k, they are more than likely not calculating their retirement number assuming they will withdraw $250k per year. So it’s more likely that they have $2-3M by the time they are age 70, meaning their effective rate during their entire retirement will get no where near the 22% marginal rate they are paying today in a Roth.
$IXHL & $RMD Potential Synergy https://preview.redd.it/le8r2fulfiff1.png?width=1080&format=png&auto=webp&s=f5084e95eb39d2f5682d78d8321891b2b8207dc7
$IXHL & $RMD Potential Synergy -- my thesis Call it speculation, but I just connect the dots and follow the breadcrumbs. The connection between ResMed (RMD) & Incannex (IXHL) is there—any way you slice it. 🔍 Key Observations: RMD is one of the top players in sleep medicine solutions in the world of big pharma. RMD has made at least 29 acquisitions in its history, 5 of which occurred in the past 5 years, all in sleep-related diagnostics, digital solutions, or care. RMD’s most recent acquisition was May 2025 with VirtuOx, a co specializing in at-home testing for sleep apnea & respiratory care (buyout amount never disclosed). RMD has a Ph.D.-level employee on the IXHL Clinical Advisory Board, which could suggest strategic vetting, backchannel engagement, desire to diversify beyond its core sleep apnea hardware (CPAP/ventilation). Facts aside for a sec—JMHO—but a Ph.D. employee of a $30B+ medtech co wouldn’t sit on the board of a tiny biotech unless there was: strategic value, early DD, & relationship development underway. 👨⚕️ Clinical & Market Context: FDA already green lit IXHL's IHL‑42X for Phase 3 of RePOSA trial. If successful, it could be the first FDA-approved oral therapy for OSA. IXHL’s CEO remains bullish on IHL‑42X, calling it a: “high-value asset” and a “breakthrough opportunity” 💎 Market Disruption Potential: An RMD pivot away from hardware would unlock the $10B+ market of patients beyond CPAP reach. 1B+ people globally suffer from sleep apnea, with majority having OSA, the most common type. Think of how many of these people would want to ditch the ugly & uncomfortable mask for a simple oral pill — probably all of them. 📰 Media Coverage & Interest: There’s a reason the New York Times caught wind of this potential game changer in an article posted a few days ago: 👉 NYT Article – July 23, 2025 💭 Final Thoughts: To think that there are no talks going on or no interest by big pharma in IXHL would be simply naive. As the saying goes, “Where there’s smoke, there’s fire.”
RMD stock just had 52 week high. It's having a run of its own that parallels with IXHL hence speculation.
RMD is trending because its being crossposted to from IXHL. It isnt organic.
current RMD age is 73, but iirc, that will be increased to 75 in the next couple of years
> So if you can afford to, why wouldn't you want to max out your 401k? You're literally getting $5k+ more in take home pay and if you only withdraw the standard deduction limit in retirement, you would pay no taxes on it. And, often enough, your employer will give you *free money* matching a portion of how much you contribute! > Why doesn't everyone do this then? The majority of people do contribute to their 401k. As far as withdrawal strategy goes, there are caveats. If you're doing estate planning and want to leave something great to your beneficiaries, they're far better off if you drain your 401k/tIRA first and save the Roth for last. Reason: If you inherit someone's IRA while in your prime working years, you have RMD's and a total of 10 years to draw it down, and that's all ordinary income on top of what you're already making at your day job. You can easily have 40% of each IRA distribution go to taxes. Axe me how I know...
Yea this is a reason why you might not want to have 100% in Roth accounts. Even if you like Roth accounts to avoid RMD or other reasons it probably would be beneficial to contribute some amounts to a traditional , because as you said while working you tax deduction could be 20% ; then when retired your taxes could be zero or 10% or something low if you are with drawing some non taxable income from your Roth accounts
I'm not going to error check your effective tax rate calculations, so let's assume they are right. Yes, you can withdraw up to the standard deduction tax-free, because the two cancel out to zero. But you're either going to pay tax now or pay later. There is no free lunch. The goal is to get the pre-tax money out with the lowest tax over the long term, not just year over year. Ed Slott has a quote: "An IRA is an IOU to the IRS." (Obviously it applies to pre-tax 401/403 as well.) If you max out the pre-tax 401(k) and presumably receive a match of some kind for 35 years, you're going to have a hell of a lot more money in there that will eventually come out in big, taxable chunks with RMD. So managing withdrawals to incur some tax each year makes sense. This is primarily why we convert to Roth when we first retire and income is low. We can cap conversions in the 12% or even 22% tax bracket, whichever one makes the most sense in terms of saving future tax.
This is the 2nd day that RMD and IXHL have had very sympathetic trading patterns. I don't think this ends with just the press release. https://preview.redd.it/ied5r16x5vef1.png?width=1397&format=png&auto=webp&s=c0cc029fdc5a7705a136f873b3d07dc9b6fa6753
You should read through this: [https://www.bogleheads.org/wiki/Managing\_a\_windfall](https://www.bogleheads.org/wiki/Managing_a_windfall) And keep in mind that reasonable, diverse investment funds like VT or the equivalent of VTI and VXUS should double your money every 7 to 10 years. If some or all is in a traditional retirement account, withdrawals will be taxable and you will have 10 years to completely withdraw, probably with an RMD each year. I'd recommend (A) taking more or less equal amounts to keep your tax bracket as low as possible and (B) cranking up your own 401k withholding to offset some of the income.
Sometime in July. Unless it is bought out by Lily or RMD, then you will here the news from them and we'll all be rich.
On Feb 4 2025 $RMD sent Dr. Alison Wimms to IXHL as a clinical advisor for early pipeline and risk due diligence. In Mar 2025 $RMD began recruiting M&A integration specialists. This appears to be the first time they ever advertised for dedicated M&A integration experts. The tight timing suggests these moves were linked. The new hires will build AI powered toolkits and standard processes. Their work feeds into Resmed’s AI/ML Integration Center of Excellence. Taken together these steps hint at coordinated deal preparation around IXHL
Might surprise you, but most people’s goal in retirement is not to take just their RMD and leave the most possible money to their kids in a taxable retirement account that needs to be liquidated in 10 years. Also there is a lot to minimize in a brokerage account lol. Literally the most control you can have over your taxable gains, interest and dividends.
Pre-taxed 401K if available or IRA. The tax brackets and standard deductions increase over time, effectively resulting in a lower taxable income on the same nominal amounts from year to year. The Roth IRA, when taxed, experiences a significant reduction in compounding over a lifetime compared to a traditional 401K/IRA. In the event of an unforeseen circumstance requiring early withdrawal from the Roth IRA before the age of 59, the intended benefits could be undermined, as the IRA/401K would likely accumulate a greater amount due to the advantages of pre-tax compounding. Hypothetically, The Roth IRA 5K minus all taxes vs IRA 7K pre-tax over 45 years at 10%, the Roth IRA would net 442K and the IRA 618K for a difference of 176K. If you are over 59 1/2, the 10% early withdrawal penalty doesn't apply. The Roth conversion primarily concerns Required Minimum Distributions (RMD) which can be used before or during retirement. Retired high income earners usually will have a lower earned income tax when they retire.
I never found any good calculators, so I made a massive (for me) spreadsheet to do projections based on: Starting value at the beginning of the year Variables for annual div yield and growth (that get applied to every year in the projection) RMD (or expected withdrawal) amount Amount of dividends received Amount sold (Withdrawals minus dividends received) End of year balance I have a section like that for each of my accounts, and then a summation section that adds them all up and adds in Soc Sec, taxes, and spend to come up with a total year end value projection. Once you have the basic formulas built and tweaked to project the current year and following year, you can extend it out into the future as long as you want by just copying the 2nd row. It took about a month (not full time, a few hours at a time on weekends) to build and tweak. The math isn't really complicated but it takes a while to troubleshoot your formulas so they're calculating what you really want to calculate. it doesn't account for specific stocks, just each account as a whole. And whatever you set the dividend and growth variables to applies to every year, so it doesn't consider drawdowns. But we know what long-term returns have averaged, so that has to be good enough or else it would take forever. If you're handy with Excel and good at math, you can do it. And FWIW, I've been retired 5 years, I have a very defensive portfolio, I've been taking out 3.5% - 5% each year and I have the same amount now that I had at the beginning. My projection using 4% div yield and 4% growth/yr says I'll still have 40% of my starting amount left in 30 years. The reason it gets depleted at all is because I'll have to start selling some of the dividend stocks at some point to fulfill RMDs and that has a snowball effect.
Roth IRA has a longer time horizon than any account. If OP is 40, there’s another 35 years before RMD age. The Roth IRA isn’t subject to RMDs, so it can continue to be aggressive. Also, the most important factor for Roth, no taxes. Target Date Funds are invested in multiple funds that own every asset class of the market. As you get closer and closer to age 65, these funds sell equities and buy bonds. They follow a glide path down, almost like a plane flying across the country. As you get closer to your destination, the pilot starts to descend the plan and slow it down to come in for a safe landing. For a taxable account, if none of it is for your emergency fund, then invest it to your risk tolerance. But you should always have an emergency fund and a taxable account is the primary source of it. Bucket 1 is first to withdraw, least aggressive. Bucket 2 is second to withdraw (pretax retirement assets) and allocation based on risk tolerance and/or time horizon. The time horizon isn’t binary, if you’re 95 and expect to pass on the assets but have enough for you, then time horizon extends to beneficiaries. Bucket 3 is past to withdraw, most aggressive. Grow that baby.
I’ve heard of RMD’s but what’s an RDA?
Traded in an IRA. Taxed upon withdrawal. OP previously posted at 4% RMD
Well said. We will be withdrawing more than the RMD annually.
It's in an IRA so no tax until it's withdrawn. The RMD required about a 4% annual draw based on the Jan 1 value.