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This is the year I turn 70 1/2 and I know I have to start taking distributions.

As I have multiple IRA's my question is do I have to take distributions from each account or just the required amount in total from any of the accounts?

I also 'think' I have until Apr of next year to actually 'take' the distribution for this year. Is that correct?

Thanks,
arahfool
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"I also 'think' I have until Apr of next year to actually 'take' the distribution for this year. Is that correct?"

True...but you would also have to take next's years RMD, too.

So likely unless you have a big taxable event this year, are better off taking this year's RMD this year.....otherwise, it will be double next year.



t.
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This is the year I turn 70 1/2 and I know I have to start taking distributions.

As I have multiple IRA's my question is do I have to take distributions from each account or just the required amount in total from any of the accounts?


You calculate the RMD from each account separately. (If the calculation factor is the same for all of them you can just add 'em up and do one calculation.) However, you can take the total RMD from any one account or combination of accounts you choose. Also, unlike contributions withdrawals can be other than cash. For example, if you have a stock in your IRA that you like you can just move shares of that stock to your taxable account.

I also 'think' I have until Apr of next year to actually 'take' the distribution for this year. Is that correct?

You do, but think carefully about this. Here are your first two RMD's:

Between now and 4/1/2014 based on your 12/31/2012 balance and 12/31/2013 age.

Between 1/1/2014 and 12/31/2014 bsed on your 12/31/2013 balance and 12/31/2014 age.

If you take both in calendar 2014 this could have an unpleasant effect on the taxability of your SS benefit and the amount of your Medicare Part B premium in 2016.

Details are in IRS Publication 590.

Phil
Rule Your Retirement Home Fool
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You can take RMD from any account so long as you take the total amount required by all accounts. Be warned if you don't inform them what you are doing some IRA trustees might automatically payout the RMD. This almost happened to a friend. One bank sent him a letter saying they would send him a check on a certain date. He quickly called them and told them he had already taken his RMD elsewhere and they had better not send him a check without a written request.
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As I have multiple IRA's my question is do I have to take distributions from each account or just the required amount in total from any of the accounts?

You calculate the RMD from each account separately. (If the calculation factor is the same for all of them you can just add 'em up and do one calculation.) However, you can take the total RMD from any one account or combination of accounts you choose. Also, unlike contributions withdrawals can be other than cash. For example, if you have a stock in your IRA that you like you can just move shares of that stock to your taxable account.

Phil
Rule Your Retirement Home Fool


That is exactly what I wanted to hear <g>. The reason being is that my primary account is an annuity with a guaranteed 7.2% return and I want to delay my withdrawals from that for at least another year.

I am not sure how or what would cause the calculation factor to change from account to account?

I am still doing the math on whether to delay this year's withdrawal until 2014.

Thanks,
arahfool
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You can take RMD from any account so long as you take the total amount required by all accounts. Be warned if you don't inform them what you are doing some IRA trustees might automatically payout the RMD. This almost happened to a friend. One bank sent him a letter saying they would send him a check on a certain date. He quickly called them and told them he had already taken his RMD elsewhere and they had better not send him a check without a written request.

That is very good to know. I will call and make sure there is no 'automatic' on my account.

Thanks!
arahfool
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I am not sure how or what would cause the calculation factor to change from account to account?

A mix of spouse and non-spouse beneficiaries among accounts.

Phil
Rule Your Retirement Home Fool
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Phil wrote
Between now and 4/1/2014 based on your 12/31/2012 balance and 12/31/2013 age.

Between 1/1/2014 and 12/31/2014 bsed on your 12/31/2013 balance and 12/31/2014 age.


While you certainly can delay taking cash until the last week without penalty, there is potential "gotcha" --

Just hang some numbers - say your IRA total on 12/31/2012 is $100,000 which leads to a RMD of $3,649.63 -- Between 12/31/2012 one of two things is going to happen -- your IRA will grow or shrink. Growth is good. But should the market tank and you $100,000 drop in say $90,000 -- you would still have to remove $3,649.63 which is a significantly larger percentage of your IRA.

That is why in the case of IRAs, the idea of delaying taxes no matter what is not always such a great plan. Myself -- I tend to take the money and run. In the nice event the market goes up, I get the market increase as capital gains which have a lower tax rate than ordinary income.

Gordon
Atlanta
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Phil wrote
Between now and 4/1/2014 based on your 12/31/2012 balance and 12/31/2013 age.

Between 1/1/2014 and 12/31/2014 bsed on your 12/31/2013 balance and 12/31/2014 age.

While you certainly can delay taking cash until the last week without penalty, there is potential "gotcha" --

Just hang some numbers - say your IRA total on 12/31/2012 is $100,000 which leads to a RMD of $3,649.63 -- Between 12/31/2012 one of two things is going to happen -- your IRA will grow or shrink. Growth is good. But should the market tank and you $100,000 drop in say $90,000 -- you would still have to remove $3,649.63 which is a significantly larger percentage of your IRA.

That is why in the case of IRAs, the idea of delaying taxes no matter what is not always such a great plan. Myself -- I tend to take the money and run. In the nice event the market goes up, I get the market increase as capital gains which have a lower tax rate than ordinary income.

Gordon
Atlanta


Point taken, though my primary focus is on the taxable income, not the performance. As I mentioned, I am 'locked in' at 7.2%.
From what I have read about possible/pending/threatened/whatever changes to the AMT level, I want to be able to stay below that threshold, as I currently am.

Although I am sure I could find ways to spend it, I don't currently 'need' the monies so I want to let it ride/grow. This is exactly the same logic/process I went through when deciding to start drawing Social Security at 62. Circumstances were different then as I chose to draw at 62.

Thanks,
arahfool
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I am sure you understand, withdrawing is not the same as spending. Some people actually take their IRA withdraws and stick them in an investment account. Another option in the area is max out the 15% tax bracket with withdraws form an IRA that are converted to Roths. You do not avoid the annual IRA withdraw, but you will lower your future RMDs.

If your marginal federal tax rate is above 15%, one needs look a bit closer - things like state and local income taxes will enter into which option is better in terms of dollars in your pocket X years in the future.

Gordon
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I am sure you understand, withdrawing is not the same as spending.

I do but I am not sure about my DW <g>.

Thanks,
arahfool
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From what I have read about possible/pending/threatened/whatever changes to the AMT level, I want to be able to stay below that threshold, as I currently am.

What have you been reading where? It was like losing an old friend when they permanently fixed the previously annual AMT problem as part of the "cliff" legislation.

Phil
Rule Your Retirement Home Fool
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From what I have read about possible/pending/threatened/whatever changes to the AMT level, I want to be able to stay below that threshold, as I currently am.

What have you been reading where? It was like losing an old friend when they permanently fixed the previously annual AMT problem as part of the "cliff" legislation.

Phil
Rule Your Retirement Home Fool


I must confess that I have read so many what if scenarios regarding the 'cliff' that I have reached information overload. I didn't even know it had been permanently fixed, I thought they had just extended the deadline.

arahfool
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I have all my retirement IRA's with Vanguard. Each January they send me a statement showing the year end total amount and what the RMD should be.
Jim
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