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Author: aadrew Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19257  
Subject: MRD Date: 2/2/2002 8:57 PM
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I'm trying to help my 70-1/2 year old mother. She is going to start to withdraw from her IRA, and has elected the take it all out over a 5-year period rather than the 10-year option that the provider also offered.

Her concern is 2-fold:
1. taxes she will pay (no getting around this, but aren't the current Bush administration tax rates "better" than what was or what might be in the future?)
2. FDIC-insured limit at her bank - she will probably take her IRA money and put what she doesn't spend into the bank. She is concerned that that she will max out and need to find another place to put her IRA distributions. Any suggestions where to put the excess money and/or info about the FDIC limit would be much appreciated.

I am equally clueless.

Aadrew
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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7741 of 19257
Subject: Re: MRD Date: 2/3/2002 3:54 AM
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I'm trying to help my 70-1/2 year old mother. She is going to start to withdraw from her IRA, and has elected the take it all out over a 5-year period rather than the 10-year option that the provider also offered.

Let's stop here for a second. Is this what she really wants to do? I ask because it appears from the rest of your post that she doesn't really need or want the money, and she's concerned about having too much in the bank. It's not adding up to me.

If the problem is that her custodian demands that she liquidate the account within a specified period, perhaps she should move it to a more accomodating trustee.

Phil Marti

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Author: buznitz One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7742 of 19257
Subject: Re: MRD Date: 2/3/2002 7:45 PM
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I'm trying to help my 70-1/2 year old mother. She is going to start to withdraw from her IRA, and has elected the take it all out over a 5-year period rather than the 10-year option that the provider also offered.

Be aware that the IRS changed the requirements for withdrawal of IRA funds starting at age 70-1/2. She can withdraw at a much reduced rate thereby incurring less tax liability and allowing the remaining funds to keep on growing tax deferred. For the first withdrawal she can take the total value of her IRA (and 401K's if any) on December 31, 2001 and divide it by 24.7 (not sure of the decimal amount). For the second withdrawal she takes the value of her IRA's on December 2002 and divides by 23.? (and so on). There is a table published by the IRS (someone else can provide the exact number).
If the administrator requires a different withdrawal then have the IRA moved to another administrator or bank (make it a direct transfer between administrators). Most banks would be willing to provide the paperwork for direct transfers. At any time she can withdraw more than the required amount if she wants the money for some reason. Good Luck

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Author: fooldaveonce One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 7744 of 19257
Subject: Re: MRD Date: 2/4/2002 7:58 PM
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An rmd schedule from American Express lists the "applicable divisors" for every age from 70 (26.2) to 111 (2.6). Here they are from age 71 to 81:
71, 25.3; 72, 24.4; 73, 23.5; 74, 22.7; 75, 21.8; 76, 20.9; 77, 20.1; 78, 19.2; 79, 18.4; 81, 16.8.
I understand the schedule is also on the IRS Web site -- I've just not been able to find it.

Fooldaveonce

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