A Comprehensive Guide to RMDs for 2024
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In this episode we're going to give you a comprehensive guide to Required Minimum Distributions (RMDs) including:
1. What are required minimum distributions?
2. How do I calculate my required minimum distribution?
3. How are my RMDs taxed?
4. What happens if you don't take the RMD?
5. Am I required to take an RMD on a Roth IRA or Roth 401?
6. How do the rules differ for inherited IRAs?
7. How do I reduce taxes on my qualified accounts and how do I reduce my RMDs?
00:00 - Intro
01:07 - What is a Required Minimum Distribution (RMD)?
01:40 - When do RMDs start?
02:15 - What happens if you don’t take an RMD?
03:03 - How are Required Minimum Distributions calculated?
05:29 - How are Required Minimum Distributions calculated
06:06 - What are the rules for Inherited IRAs?
08:01 - Does the stretch rule still apply to RMDs?
10:45 - How do you reduce the tax impact caused by RMDs?
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ABOUT ME
I’ve always been passionate about personal finance, investing, real estate, and helping people find the freedom to live their life with purpose. But when my dad died in 2015, I tried to help my Mom find an advisor to sort out her finances. Instead of a helping hand, I found an industry of financial advisors dominated by glorified salespeople working on commission - pushing products that were not in my mother’s best interest. Or advisors with minimums that shut-out all but the ultra wealthy. Disappointed with the options, I took matters into my own hands and launched Foundry Financial, a wealth management firm with transparent pricing that specializes in helping provide clarity around money - so you have the confidence to make smart decisions.My goal is to help a million people retire without worry!
📅 THE BASICS OF RETIREMENT PLANNING
Retirement planning has several steps, with the end goal of having enough money to quit working and do whatever you want. Our goal is to help people master retirement and retire without worry.
Step 1: Know when to start retirement planning. When should you start retirement planning? The earlier you start planning, the more time your money has to grow. That said, it’s never too late to start retirement planning. Even if you haven’t so much as considered retirement, don’t feel like your ship has sailed. Every dollar you can save now will be much appreciated later. Strategically investing could mean you won't be playing catch-up for long.
Step 2: Figure out how much money you need to retire, The amount of money you need to retire is a function of your current income and expenses, and how you think those expenses will change in retirement.
Step 3: Prioritize your financial goals. Retirement is probably not your only savings goal. Lots of people have financial goals they feel are more pressing, such as paying down credit card or student loan debt or building up an emergency fund.Generally, you should aim to save for retirement at the same time you're building your emergency fund - especially if you have an employer retirement plan that matches any portion of your contributions.
Step 4: Choose the best retirement plan for youA cornerstone of retirement planning is determining not only how much to save, but also asset allocation. It can make a massive difference in your retirement plan.
Step 5: Select your retirement investments. Retirement accounts provide access to a range of investments, including stocks, bonds and mutual funds. Determining the right mix of investments depends on how long you have until you need the money and how comfortable you are with risk. It’s often helpful to talk with an adviser to discover the right mix of stocks and bonds.
❣ SPONSORED No, this video was not sponsored.
⚠️ "DISCLAIMER:⚠️This is not financial or investment advice. This Channel is meant for EDUCATIONAL AND ENTERTAINMENT PURPOSE only. None of this is meant to be construed as investment advice, it's for entertainment purposes only. #retirementplanning #retirement #passiveincome
Пікірлер: 25
I created a short document to give you a few questions to ask before claiming your RMDs. Feel free to download it here. foundryfinancial.net/a-complete-guide-to-rmds
Soooo glad I went with a Roth.
Thank you for this content. Much appreciated and now subscribed to keep learning.
@foundryfinancial
2 ай бұрын
Thanks, John!
Might have missed this, but think it still works to convert, even if you pay for conversion by taking a larger withdrawal. Would like your comment. Also, recognizing taxes will climb on 401k withdrawals for surviving spouses after a death. Seems like a reason to convert sooner.
@foundryfinancial
3 ай бұрын
Yeah, you could definitely pay by taking a larger withdrawal.
Good content on an important topic to me, just subscribed! Thanks
@foundryfinancial
3 ай бұрын
Thanks, Julie!
Great video. I inherited a non-spousal IRA in 2019 and am self employed. Worked out an interesting strategy to "convert" that into a Roth IRA via an Individual 401K account under my business. I take a distribution equal to the 401K contribution limits. Then I use that to make a pre-tax 401K contribution. At the end of the year, I do a Roth conversion on the individual 401K balance. In the end, I pay taxes twice on that money, but get one deduction, so it balances out. I have 1 more year to finish moving that inherited IRA into the Roth account. This only works if you have self employed income and the individual 401K account had some limitations as I recall, so not a strategy for most folks. I wanted to clear out that inherited account since it's more complicated to deal with and moving it to a Roth is a plus. I also have a traditional IRA and have been doing Roth conversions for the last 6 years or so to get that balance down.
@foundryfinancial
26 күн бұрын
Thanks!
For those still working you can reduce the tax impact by raising your workplace 401K and/or IRA as well as your spouse to the RMD withdrawal amount to offset the gain. The tax will eventually need to be paid, but at least you can do so at a later time when you can better plan for it. Just put the money in a savings account, CD ladder, etc and transfer the money every pay period. Don't forget that if your spouse doesn't work you can still do a pretax spousal IRA to the maximum provided your earned income covers both your maximums. You can increase your FSA amount as well as your spouse amount if you know you need dental or medical costs not covered.
OMG!!! LOL, I’ve spent so much time saving and praying my account grew and knew the RMD existed, but never imagined it would be so large if you’ve got a big nest egg. I’ll be contacting a financial planner soon, though I’m only 64 and I’ve already been pulling from it. (Should everyone have such problems 😉)
@xxxx-tb4de
13 күн бұрын
Pull from it but NEVER contact a financial planner.
Great video, I signed up for the RightCapital software. Unfortunately, it has many features missing, such as the Tax and Retirement tabs.
@foundryfinancial
3 ай бұрын
Thanks, it takes 24 hours to get access after the account is created.
@tomatodo8334
3 ай бұрын
thanks for the clarification @@foundryfinancial
Generally, is it better to take your first RMD in the year you turn 73 or wait until the following year prior to April 1?
By far the best video I have found on RMD's but, I'm still confused. I'm 58 and inherited money last year from my 60 year old sister that passed. I was told about the 10 year rule but, just recently heard about the RMD along with changes made to it in 2024. I really don't want to start taking money out now and would prefer to let it grow until I'm ready for retirement which I'm planning for 62. So, I guess my question is do I need to take an RMD now or can I wait? My impression is that if I start taking an RMD now I'm locked in and can't change in the following years. I would really appreciate your insight.
@foundryfinancial
2 ай бұрын
Thanks, John! I don’t know your specifics, so this isn’t advice - but if your sister hadn’t started taking her RMDs you have ten years to withdraw from when you inherited. You can take some now if you want or wait.
@johnmurphy7830
2 ай бұрын
Thank you very much for the info and the quick response.@@foundryfinancial
It seems a good FA or investment house will help you with your RMD's
@foundryfinancial
3 ай бұрын
They won’t with inherited IRAs, which are the trickiest. I mean custodians - advisors will.
We turn 73 in december...does that mean the following December we need to take again?
RMD age 73 for most folks? I’m retired and age 63, and I believe my RMD age will be age 75. Anyone younger than me would also have a RMD age of 75, no? That’s a lot to cover in 15 minutes!
@foundryfinancial
3 ай бұрын
Actually, you’re right on the RMD age - lots of people watching will have until 75.