Once you reach the age the law sets, you’re required to start withdrawing from most tax-deferred retirement accounts each year, and missing or under-taking an RMD carries a steep penalty. Handled well, it’s routine; handled thoughtfully, it can even do some good. And like every milestone, it’s not just the RMD, it’s all the stuff attached to it. A financial advisor can help you indetify RMDs and set a plan for action. And remember, every path is unique; these are suggestions, not advice.
Get the mechanics right
- Know which accounts require RMDs and how the amount is calculated each year, it changes annually with your balance and age.
- Set up the withdrawals on a schedule so a deadline never slips; the penalty for missing one is significant.
- Plan the tax withholding, since RMDs are generally taxable income and can nudge you into a higher bracket.
Make the required, useful
- A Qualified Charitable Distribution can send some or all of your RMD straight to charity, satisfying the requirement while reducing your taxable income, worth exploring if you give.
- A CPA or advisor can coordinate RMDs with the rest of your income and any Roth-conversion strategy.
Keep your plan in step
- As your accounts draw down, confirm your beneficiary designations are current and your estate plan still fits, and keep your RMD records in your Gentreo Digital Vault.
Documents to consider
You don’t have to wrestle with the math alone. Set the withdrawals up right, loop in a tax pro, and Gentreo helps you keep the records organized.
More control. Less penalty.
Gentreo is not a law firm or a substitute for a law firm or attorney or an attorney’s advice. Gentreo provides self-help services at your specific direction.
