I suppose one can take more than RMD....but never less. I know how much money I have in my IRA and I have a good idea about my life expectancy. I plan on taking more than required minimum.
Just a couple notes here. Since Secure 2.0 pushed the RMD age out to 73 if you were born before 1960 and 75 if you're 1960 or younger, the examples he has here have a different factor. Roth 401K's have no RMD. If your spouse and you are relatively the same age (within just a few years), you need to calculate the RMD for each 401K or IRA separately based on the age of the person who owns it. That means you can't just pull your total RMDs out of one account, you need to calculate your RMD's for each account and pull the distributions from each account.
10:22 Does the "multiple beneficiaries" caveat mean what I think it does? If I have a sister 10 years younger than me and we were named 50%/50% as the beneficiaries of the IRA at the financial institution, she needs to use my age in doing her calculation? That seems strange and unfair. Would the IRS really know about and be able to audit this?
Looking for verification of the Distribution Factor (DF) for an Inherited IRA I received from my mom who passed away in 2010. I was 57 in the year of her passing. If I follow the video, I would use the Single Life Expectancy Table (SLET) for my age the following year (when I was 58). In 2011 the DF was 27.0 for age 58. So, fast forward to now in 2023 (12 years later). My 2023 DF = (27.0 - 12 ) or 15.0. However, the SLET has been updated by the IRS over that time. The 2022 version of the SLET has the DF for a 58 year old now as 28.9. Using that number my DF for 2023 would be (28.9 - 12) or 16.9. Which one is correct? Is there another answer?
What if you have TWO separate IRA accounts and you are required to take 4% and these accounts are with two different brokerage places. Do you take 2% from both ? Or 4% from just one of them ?
If both are traditional IRAs you can take solely from one due to something called RMD aggregation rules. This video explains this more thoroughly - th-cam.com/video/ry_O1Fumnws/w-d-xo.html
Good catch. Not sure why this was off. Copied table from a different, typically reputable source. Lesson learned. Make your own tables. 🙂 Here are the charts direct from the Federal Register - www.federalregister.gov/documents/2020/11/12/2020-24723/updated-life-expectancy-and-distribution-period-tables-used-for-purposes-of-determining-minimum
At the 2 minute mark you said Roth accounts are subject to rmds. Please explain. Do I have to withdraw from my Roth just like my traditional iras? If so, how is it not taxed?
Great clarifying question. Not Roth IRAs but rather Roth 401ks. Roth IRAs do not have RMDs but a Roth 401k will. It will be tax free but will be a forced withdrawal nonetheless.
@@SafeguardWealthManagement Follow up question. Given that Roth 401(k) is subject to RMD, .... Is this potentially solved by rolling the Roth 401(k) to an individual Roth IRA? Is this an inherent advantage of an individual Roth IRA?
What table would you use if you have 2 IRA accounts. One IRA has your spouse that is 12 years younger than you as the sole survivor, and another IRA has your spouse listed along with your child as another beneficiary?
The IRS has yet to update publications. So the up to date tables are located on the Federal Register - www.federalregister.gov/documents/2020/11/12/2020-24723/updated-life-expectancy-and-distribution-period-tables-used-for-purposes-of-determining-minimum
What happens if your spouse and 3 children have a percentage share ? Scenario 1 spouse 40% children each 20%.Senario 2 spouse and children all receive 25%.
What I don't understand is if the inherited IRA with a balance of $478,000 only has to take out $16,149 and each year it increases by the 10th year the tax hit will be astronomical as the balance will be over $300,000 plus it will make that person be in a higher tax bracket. I think you take the balance and divide it by 10. That would result in a $43,000 withdrawal and each year that goes up so the 10th year is much more manageable from a tax perspective. Your welcome lol.
It was the SECURE Act in 2019 (effective in 2020) rather than the tax cut of 2018. The 10 year rule only applies to inheritances after Jan 1st 2020, however. Inheritances before then are under the previous stretch rules.
Yes. Thank you for pointing this out. Table was from copied from a normally reputable source. Should have made our own, our apologies. I will pin a comment with the correction. Here is the link to the to the proper tables - www.federalregister.gov/documents/2020/11/12/2020-24723/updated-life-expectancy-and-distribution-period-tables-used-for-purposes-of-determining-minimum
So if your birthday is later (at end of the year) you must use your age that you will be at the end of the year for the calculation ? Not your present age?
I'm turning 70 this year and my best advice to all young folks is to NOT have any kind of IRA, just put your savings it in a savings account or a CD or invest it as you see fit. Pay the tax up front so you are not victimized in old age with the intentionally convoluted tax code MEANT TO GET AS MUCH OF YOUR MONEY AS POSSIBLE and be aware that there are income thresholds when you retire and are collecting Social Security benefits that, should you cross those income thresholds, your Social Security will be taxed and you'll be hit with a huge tax bill on either 50% or 86% of your Social Security as well as all of your other taxable income at tax time. My husband and I are not rich by any means, but we are having to be careful about investment gains and CD interest earnings on our non-IRA savings money because we DO NOT want to cross either of the IRS's income WAY TOO LOW thresholds and have to pay federal income tax on 50% or 86% of our Social Security.
Many people change jobs and old pre-tax 401k accounts roll into traditional IRA accounts. Taking advice in a TH-cam comment isn't wise. Everyone's situation is different and they should consult with a fee only fiduciary after getting the full picture of their cash flow, investments and debt.
Can't believe gold diggers have a separate RMD table, that's more advantageous!! Ofcourse not everyone is a gold digger. Roth 401K gets counted too for RMDs. I read somewhere, Roth 401K to Roth IRA conversion may go away; especially if current BBB is approved as is by the senate, which is unlikely.
Let the learning begin, thanks to Eric Sajdak, nobody explains it better!
Thanks David!
I suppose one can take more than RMD....but never less. I know how much money I have in my IRA and I have a good idea about my life expectancy. I plan on taking more than required minimum.
Just a couple notes here. Since Secure 2.0 pushed the RMD age out to 73 if you were born before 1960 and 75 if you're 1960 or younger, the examples he has here have a different factor. Roth 401K's have no RMD. If your spouse and you are relatively the same age (within just a few years), you need to calculate the RMD for each 401K or IRA separately based on the age of the person who owns it. That means you can't just pull your total RMDs out of one account, you need to calculate your RMD's for each account and pull the distributions from each account.
25% penelty now.
DO you have to withdraw from each account or can you just make one withdrawal that equals the total for all accounts ?
Add in a declining stock market and add in your ever increasing RMD. “I shoulda had a ROTH”
Difference between Roth IRA from Roth 401k?
10:22 Does the "multiple beneficiaries" caveat mean what I think it does? If I have a sister 10 years younger than me and we were named 50%/50% as the beneficiaries of the IRA at the financial institution, she needs to use my age in doing her calculation? That seems strange and unfair. Would the IRS really know about and be able to audit this?
The IRS table reads with the spouses age across the top and the taxpayer's age along the left side. Is that correct?
Looking for verification of the Distribution Factor (DF) for an Inherited IRA I received from my mom who passed away in 2010. I was 57 in the year of her passing. If I follow the video, I would use the Single Life Expectancy Table (SLET) for my age the following year (when I was 58). In 2011 the DF was 27.0 for age 58. So, fast forward to now in 2023 (12 years later). My 2023 DF = (27.0 - 12 ) or 15.0.
However, the SLET has been updated by the IRS over that time. The 2022 version of the SLET has the DF for a 58 year old now as 28.9. Using that number my DF for 2023 would be (28.9 - 12) or 16.9.
Which one is correct? Is there another answer?
What if you have TWO separate IRA accounts and you are required to take 4% and these accounts are with two different brokerage places. Do you take 2% from both ? Or 4% from just one of them ?
If both are traditional IRAs you can take solely from one due to something called RMD aggregation rules. This video explains this more thoroughly - th-cam.com/video/ry_O1Fumnws/w-d-xo.html
Barry: I am looking at a new uniform life table which shows the divisor at age 79 as 21.1 not 21.0. Which is correct?
Good catch. Not sure why this was off. Copied table from a different, typically reputable source. Lesson learned. Make your own tables. 🙂 Here are the charts direct from the Federal Register - www.federalregister.gov/documents/2020/11/12/2020-24723/updated-life-expectancy-and-distribution-period-tables-used-for-purposes-of-determining-minimum
@@SafeguardWealthManagement So . . .which was right?
At the 2 minute mark you said Roth accounts are subject to rmds. Please explain. Do I have to withdraw from my Roth just like my traditional iras? If so, how is it not taxed?
Great clarifying question. Not Roth IRAs but rather Roth 401ks. Roth IRAs do not have RMDs but a Roth 401k will. It will be tax free but will be a forced withdrawal nonetheless.
@@SafeguardWealthManagement Follow up question. Given that Roth 401(k) is subject to RMD, .... Is this potentially solved by rolling the Roth 401(k) to an individual Roth IRA? Is this an inherent advantage of an individual Roth IRA?
What table would you use if you have 2 IRA accounts. One IRA has your spouse that is 12 years younger than you as the sole survivor, and another IRA has your spouse listed along with your child as another beneficiary?
@@_-Karl-_ Thank you! 😊
My wife is 6 years older than me, so if I understand correctly, we would need to use the uniform table and start taking RMD’s when she turns 72?
Where can I see the full tables?
The IRS has yet to update publications. So the up to date tables are located on the Federal Register - www.federalregister.gov/documents/2020/11/12/2020-24723/updated-life-expectancy-and-distribution-period-tables-used-for-purposes-of-determining-minimum
I have no idea of which RMD table I will be subject too, 14 years from now.
What table would I use if the beneficiary of my IRA is my son who is 33 years younger than me or mt granddaughter who is 58 years younger?
@@_-Karl-_ Thank you
What happens if your spouse and 3 children have a percentage share ? Scenario 1 spouse 40% children each 20%.Senario 2 spouse and children all receive 25%.
What I don't understand is if the inherited IRA with a balance of $478,000 only has to take out $16,149 and each year it increases by the 10th year the tax hit will be astronomical as the balance will be over $300,000 plus it will make that person be in a higher tax bracket. I think you take the balance and divide it by 10. That would result in a $43,000 withdrawal and each year that goes up so the 10th year is much more manageable from a tax perspective. Your welcome lol.
I thought with the tax act passed in 2018 any inherited IRA, ROTH has to be fully withdrawn in 10 years
It was the SECURE Act in 2019 (effective in 2020) rather than the tax cut of 2018. The 10 year rule only applies to inheritances after Jan 1st 2020, however. Inheritances before then are under the previous stretch rules.
There are errors in the Uniform table at 2:49. EX: 27.3 for 72 should be 27.4, and 21 for 79 should be 21.1, etc.
Yes. Thank you for pointing this out. Table was from copied from a normally reputable source. Should have made our own, our apologies. I will pin a comment with the correction. Here is the link to the to the proper tables - www.federalregister.gov/documents/2020/11/12/2020-24723/updated-life-expectancy-and-distribution-period-tables-used-for-purposes-of-determining-minimum
My wife is less than 10 years younger than I and she is the sole beneficiary. That does not meet any of the 3 table requirements?
Ok but age when?
So if your birthday is later (at end of the year) you must use your age that you will be at the end of the year for the calculation ? Not your present age?
I'm turning 70 this year and my best advice to all young folks is to NOT have any kind of IRA, just put your savings it in a savings account or a CD or invest it as you see fit. Pay the tax up front so you are not victimized in old age with the intentionally convoluted tax code MEANT TO GET AS MUCH OF YOUR MONEY AS POSSIBLE and be aware that there are income thresholds when you retire and are collecting Social Security benefits that, should you cross those income thresholds, your Social Security will be taxed and you'll be hit with a huge tax bill on either 50% or 86% of your Social Security as well as all of your other taxable income at tax time. My husband and I are not rich by any means, but we are having to be careful about investment gains and CD interest earnings on our non-IRA savings money because we DO NOT want to cross either of the IRS's income WAY TOO LOW thresholds and have to pay federal income tax on 50% or 86% of our Social Security.
Many people change jobs and old pre-tax 401k accounts roll into traditional IRA accounts. Taking advice in a TH-cam comment isn't wise. Everyone's situation is different and they should consult with a fee only fiduciary after getting the full picture of their cash flow, investments and debt.
Can't believe gold diggers have a separate RMD table, that's more advantageous!! Ofcourse not everyone is a gold digger.
Roth 401K gets counted too for RMDs. I read somewhere, Roth 401K to Roth IRA conversion may go away; especially if current BBB is approved as is by the senate, which is unlikely.
Why do you make think complicated ????