Did you know there are strategies you can use to reduce your required minimum distributions (RMDs) from your individual retirement account? In episode 56 of the YMYW podcast, find out six ways to do this so you can keep more of the money you’ve earned, saved, and invested through your entire working life. Original publish date August 27, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.
00:00 – Intro
01:45 – “Once you turn 70 ½, you have to start pulling money out of an IRA (individual retirement account). If you are 70 ½ and still working, and own less than 5% of the company, you can delay your required minimum distribution until you retire.”
04:13 – “Once you turn 59 ½ you can withdraw money from your tax-deferred accounts without paying a 10% penalty.”
06:54 – “A lot of people don’t realize that you can do these Roth conversions even before 59 ½. You could be any age and do a conversion.”
10:45 – “This is a valid way to reduce your RMDs – invest in a QLAC (quality longevity annuity contract).”
12:20 – “You can invest in your IRA up to 20% of your IRA or 401(k) or $125,000 – whichever is less.”
13:04 – “Another way to lower your RMDs is to use tax-deferred accounts for bonds and bond funds, and use taxable accounts for stocks and stock funds.”
16:30 – “If you invest in stocks outside of your retirement accounts and you hold a stock or stock mutual fund for at least a year and you sell it, it’s subject to a special long-term capital gain rate.”
23:38 – “(Another option is to) donate your required minimum distributions.”
29:42 – “A lot of men and women are living into their nineties and hundreds…if you haven’t really thought this through, it sort of messes up your retirement plan.”
32:30 – “If we’re living a lot longer, how do we adjust our retirement plans to be able to accommodate that?”
34:43 – “The old rule used to be ‘save 10% of your income.’ A lot of advisors are now saying 15%, that’s what we say.”
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IMPORTANT DISCLOSURES:
Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are not intended as investment advice or to predict future performance.
• Past performance does not guarantee future results.
• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. As rules and regulations change, content may become outdated.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
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