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How do you calculate minimum retirement distributions from retirement accounts after age 70 1/2 from Ira and Keough Accounts. Also is it perferable to transfer all monies from Keough Accounts into Ira Account, and just take distributions from the one account.
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Greetings, Mistyblue33, and welcome. You asked:

<<How do you calculate minimum retirement distributions from retirement accounts after age 70 1/2 from Ira and Keough Accounts. Also is it perferable to transfer all monies from Keough Accounts into Ira Account, and just take distributions from the one account.>>

The methodology for calculating MRD is spelled out in IRS Publication 590 (Individual Retirement Arrangements). You can download that pub at http://www.irs.ustreas.gov/prod/forms_pubs/index.html.

It might make it easier to consolidate your Keogh and IRA in the IRA alone, but you don't have to do that.

Regards..Pixy
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It might make it easier to consolidate your Keogh and IRA in the IRA alone, but you don't have to do that.

In fact, you might not want to: you can choose different withdrawal schedules for each of the accounts, the result being you have more control over how soon your money is taxed and then handed to you.
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This is one of the trickiest areas in what is known as "wealth transfer". Once you reach the magic 70 1/2 mark you make a choice, to recalcualte or not. Some advisers suggest in a husband / wife situation that the husband make the election to recalculate with the wife as primary beneficiary. Wife does not elect. Why? Because upon the death of the owner of the IRA (and the subsequent death of the wife if she elects to recalculate) there can be no more recalculation and the tax-deferred asset will be brought into income quite quickly. With wife as beneficary who didn't elect she gets another crack. Some advisers will then break the remaining IRA into separate IRAs with each child as beneficiary of each respective chunk which allows them to further defer after Mom's death. Again, this is very exotic, but very important stuff. Being able to keep the tax deferral going for extra years into the next generation can be very valuable.

Another problem regarding tax-deferred assets is the fact that they will not only be subject to eventual income tax, they will also be subject to estate tax at some time if the total estate is large enough. Far too many people think that $2,000,000 in a rollover IRA means they will leave their heirs $2,000,000. Not so. This kind of asset, without proper planning can take a 75% or better haircut between estate and income taxes. Word to the Foolish - if you have numbers that may approach these see an estate planner pronto!
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mistyblue

I agree with lectic, making a Mandatory Minimum Distribution (MMD) election on an IRA is an EXTREMELY important decision. The election is IRREVOCABLE and has major tax and estate implications.

I strongly recommend you talk with someone who is well versed in this area.

ez
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