If you have to ask what an RMD is, then you're not old enough. Granted, you only have to worry about it when you hit 73, but I'm trying to learn more about it and how to make a plan to navigate it before I get too old and forget.
We're not old enough at the moment, but the wife and I are entering a window of where we're <9 years away from it. And the older you get, the faster time rolls. Was wondering if anyone has figured out a good method to move investments, whatever, to try and minimize it. We were DINKs the whole way, and we scrimped and saved over the years without choking off some of our wants. Now that we've got a few 401k's and IRAs looking at us in the face, each by itself isn't such a big deal.
But RMD doesn't look at it like that. They take the aggregate of your investments and plug and chug into a formula and then it tells you what you MUST withdraw per year to avoid a 50% tax penalty. I did an RMD calculator thing and if we make even close to our current returns, we'll be getting a jacked up RMD every year after 73. And they don't CARE how much retirement, other income, or Social Security you get every year either. It's by age and how much you had in the investments as of December 31 the year previous. It's not a horrible deal actually, since I think it's supposed to run you dry by the time you're 100 years old. At that point, you've lived enough, I suppose.
So what's the big deal you ask? How is getting money in the bank bad? Well, it's just that sitting in the bank, or tied up in CD's or something, it won't be garnering much interest while it sits. Told the wife I think I'll adopt a blonde 21 year-old girl that owns a liquor store and invest in that. She wasn't amused. Can't even joke with that. WTF? Plus, I don't want to take it out because that's how much the gubmint tells me I have to. I want to use it the way I see fit. Plus, what if I stroke out and it doesn't kill me and I end up in a rest home? That sh*t's expensive.
I know, first world problems, but just wondering if anyone has any good info about how to "pre-distribute" without having to take out huge chunks. Or any other ideas. I got a Roth IRA too, and that doesn't have any limitations. I tossed around the idea of rolling part of the IRAs into Roth IRAs every year to try and draw down the money and pay taxes on it now, the it can be invested in the Roth IRA, hopefully grow non-taxable, and the gubmint and kiss my butt. We've programmed ourselves to save money and invest it for our nest egg, so it may be hard to envision us actually spending it. Honestly, it doesn't take as much to live in retirement than I thought. We're actually making more take-home now than we did when working since we don't contribute to our 401ks and stuff anymore. And they're fat enough now to keep rolling in dividends.
It may not even be worth it to try and manage all of it. I ought to find an old G-body Olds with a couple thousand miles on it and invest in that.
We're not old enough at the moment, but the wife and I are entering a window of where we're <9 years away from it. And the older you get, the faster time rolls. Was wondering if anyone has figured out a good method to move investments, whatever, to try and minimize it. We were DINKs the whole way, and we scrimped and saved over the years without choking off some of our wants. Now that we've got a few 401k's and IRAs looking at us in the face, each by itself isn't such a big deal.
But RMD doesn't look at it like that. They take the aggregate of your investments and plug and chug into a formula and then it tells you what you MUST withdraw per year to avoid a 50% tax penalty. I did an RMD calculator thing and if we make even close to our current returns, we'll be getting a jacked up RMD every year after 73. And they don't CARE how much retirement, other income, or Social Security you get every year either. It's by age and how much you had in the investments as of December 31 the year previous. It's not a horrible deal actually, since I think it's supposed to run you dry by the time you're 100 years old. At that point, you've lived enough, I suppose.
So what's the big deal you ask? How is getting money in the bank bad? Well, it's just that sitting in the bank, or tied up in CD's or something, it won't be garnering much interest while it sits. Told the wife I think I'll adopt a blonde 21 year-old girl that owns a liquor store and invest in that. She wasn't amused. Can't even joke with that. WTF? Plus, I don't want to take it out because that's how much the gubmint tells me I have to. I want to use it the way I see fit. Plus, what if I stroke out and it doesn't kill me and I end up in a rest home? That sh*t's expensive.
I know, first world problems, but just wondering if anyone has any good info about how to "pre-distribute" without having to take out huge chunks. Or any other ideas. I got a Roth IRA too, and that doesn't have any limitations. I tossed around the idea of rolling part of the IRAs into Roth IRAs every year to try and draw down the money and pay taxes on it now, the it can be invested in the Roth IRA, hopefully grow non-taxable, and the gubmint and kiss my butt. We've programmed ourselves to save money and invest it for our nest egg, so it may be hard to envision us actually spending it. Honestly, it doesn't take as much to live in retirement than I thought. We're actually making more take-home now than we did when working since we don't contribute to our 401ks and stuff anymore. And they're fat enough now to keep rolling in dividends.
It may not even be worth it to try and manage all of it. I ought to find an old G-body Olds with a couple thousand miles on it and invest in that.
