In our final of a three-part series of RMD, these are the most complicated techniques and very specific in nature. Every situation is different, please check with us or your tax professional prior to implementing any of these, as these are not recommendations, only possibilities. These techniques can be very helpful “if the shoe fits!”
Before we begin, one last reminder.
Two Most Important Items for any RMD
- Do not forget to take it.
- Keep good records.
Stretch IRA/RMD
Rather than distributing all funds immediately or over a mandated five-year period of time, giving heirs the opportunity to S*T*R*E*T*C*H (my attempt at grammatical humor) their IRA and other qualified benefits can be very tax friendly. Having a trust as beneficiary or keeping your old company 401k plans disqualify you from this in most cases, another reason why we rarely find it a better option to keep an old 401k at a company plan.
RMD Deferral
If you are still working, you may be able to defer your RMD for the company plan you are a participant. VERY IMPORTANT … the other qualified IRA plans will most likely still require summing the total and distributing a required RMD. This option is very specific in nature, check with us, your tax professional, or your HR representative for exact details, and keep good records of your discussions.
RMD Off-set
“In and out” of certain qualified plans I.e. SEP or others may be a possibility. If you are mandated to take and RMD, but still working, you may be able to make/receive an offsetting contribution. Be sure to check your plan specifics on this technique.
RMD Distribution Techniques
Eventually, no matter what you will need to take an RMD, so here are the popular options for where the rubber meets the road.
- Switch the distribution to your taxable account and withhold taxes (far and away our most popular technique.)
- Fund a Roth with the RMD funds.
- Spend it.
- Donate to charity.
In closing, we hope you have enjoyed our three-part series. Here is the link to the First Part “What and Why?” and Here is the Link to Part Two “Should You Take it Early?”.
Have a Great Day!
John Kvale CFA, CFP
http://www.jkfinancialinc.com
http://www.street-cents.com
8222 Douglas Ave # 590
Dallas, TX 75225
32.862838
-96.808190
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November 2017 Podcast Video, Financial Planning and Capital Market Update- By John Kvale
Here is our November 2017 Monthly review. If you are too busy to read, feel free to listen as we describe our post and thoughts in friendly podcast format.
November 2017 Video
Thank You Holiday Party Goers!
Financial Planning Tip(s)-
RMD – Required Minimum Distribution Reminder
In our post here this month, we reminded all of those with birthdays between 7-1-46 and 6-30-47 that have the unique option of deferring their first mandatory RMD taxable distribution to next year, but if you do that will mean you need to take two distributions in the same year.
Considerations:
The first year is the only time we get this option, all the future years are mandatory with not option.
Capital Market Comments
A lot of positive indicators – Markets taking notice
It appears the US and Global Economies are finally making a synched recovery. Capital Markets are taking notice.
As we mentioned here, Unemployment rate hit a very low 4.1%
This time, International Markets have wind in their sails as well….
MSCI Global Index
See you on the other side of a New Year !
Happy Fall Season!
John A. Kvale CFA, CFP
Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com
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Posted in General Financial Planning, Investing/Financial Planning, Market Comments, Monthly Review, Tax Related, Video
Tagged Deferred RMD, EFA, Global Growth, MSCI, Required Minimum Distribution, RMD