The Setup:

Do you have a strategy for required minimum distributions once you turn age 72? On today’s episode, we’ll discuss RMDs and how you should approach them in your retirement plan.

The Combination and Key Points: 

On today’s episode of Unlocking Your Financial Future, we are discussing RMDs or required minimum distributions. This rule implemented by the IRS is their way of telling you at a certain age you have to start taking money out of your pre-tax retirement accounts.

Your pre-tax accounts could be a 401(k), 457s, IRA, etc. This money has been growing tax-deferred and you’ve never had to pay taxes on it. That is until your hit the legal RMD age which is currently 72. These rules have changed recently meaning clients can take out less and later in their lifetime. People are living longer and their money has to stretch further in retirement.

Fortunately, there are tax-saving strategies available for you if you start planning early enough. RMDs don’t affect a Roth IRA account, so if done correctly, a Roth conversion may be advantageous.

RMDs aren’t all bad. If you are going to use that money in retirement, great. There are a lot of options out there to manage RMDs and that’s why you have a retirement strategy in place before you turn 72. The silver lining is, you can have options and flexibility with RMDs if you plan accordingly.

If you have any questions, please reach out to us at https://www.baschrock-fg.com/ or give us a call at 330-473-1060

To hear more you can listen to the full episode or use the timestamps below to find a specific segment.

1:05 – What is an RMD?

1:59 – Changes to RMDs

3:01 – Advantages to changes

4:03 – Alleviate tax burden

4:28 – Tax-saving strategies

5:53 – Balancing your accounts

6:39 – Asset allocations for RMDs

8:11 – Managing your distributions

9:20 – Planning accordingly

11:03 – Additional income tax

Key Quote: 

If you have a plan and you set yourself up to manage distributions at the right point in time, it can make a big difference.

Thanks for listening to another episode of Unlocking Your Financial Future. We’ll talk to you again next week!

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