Podcast Episode 340: Strategic Planning for Required Minimum Distributions
When it comes to retirement, understanding Required Minimum Distributions (RMDs) and staying ahead of them is important for financial success in retirement. In our latest podcast, Matt Pastor, RICP explains the intricacies of RMDs and sheds light on why early planning is essential.
RMDs are amounts the IRS requires retirees to withdraw annually from their retirement accounts starting at a certain age—recently updated to 73. Without strategic planning, these withdrawals can significantly impact your tax situation. Most people tend to not think about RMDs until the end of the year when they have to take money out, but we wanted to start having the conversation now to start the year. By being proactive rather than waiting, you’ll be able to manage these distributions more effectively.
One key takeaway from the podcast is the array of options available for utilizing RMDs. There are four common strategies for using the money after you withdraw it: covering living expenses, paying off liabilities, boosting cash reserves, and reinvesting after-tax amounts. Each option provides a pathway to optimize retirement funds in alignment with individual financial goals and needs.
Furthermore, we’ll explain that even if RMDs seem distant, planning conversations should begin well in advance. For those in their 60s, strategies like Roth conversions and Qualified Charitable Distributions can set the stage for a more favorable tax scenario once RMDs kick in. Proactive measures can help mitigate the risk of being thrust into a higher tax bracket later in retirement.
The podcast ultimately serves as a reminder that RMD planning is not just about fulfilling IRS requirements; it’s about tax efficiency and making informed decisions to preserve your nest egg. By engaging in early and strategic planning, retirees can navigate RMDs with confidence, ensuring a financially sound retirement journey.
Here’s some of what we discuss in this episode:
• How RMDs have changed in the last couple of years.
• What should you be thinking about if you’re turning 73 this year?
• The four primary options for how to use your RMD withdrawals.
• If you’re still a decade out, there are some tax planning conversations you should be having.
Information presented in our podcasts is considered current as of the created date. Over time, some information presented may become stale. We recommend you consult with your Financial Professional before making any changes based on information contained here.
Johnson Brunetti is a marketing name for the businesses of JB Capital and JN Financial.
Investment Advisory Services offered through JB Capital, LLC. Insurance Products offered through JN Financial, LLC.
The guarantees provided by any type of insurance contract are based on the claims-paying ability of the insurance company.
Related Resources
-
Frequently Asked Social Security Questions
Almost every American is impacted by Social Security in some way, so it’s no wonder that it’s one of the most frequently asked topics in retirement planning. When and how you start taking benefits… -
Maximizing Your Social Security Income
Social Security can serve as a safety net for many retirees, sometimes acting as a primary source of income. However, the program is highly complex with over 500 ways to claim benefits. Even one o… -
How Much Money Can I Spend in Retirement?
“How much can my spouse and I realistically spend in retirement at age 62 with $1 million saved?” Today’s hypothetical couple is asking the very question that most pre-retirees ponder when gearing… -
What Should My Tax Plan Be at Age 65 with $1 Million?
Approaching retirement with $1 million saved is an impressive milestone, but turning those savings into a sustainable income stream requires careful planning. At age 65, many retirees face the cha… -
What to Consider Before Moving in Retirement
If you have the liberty to relocate in retirement, does that mean you should? Maybe you’re a snowbird who wants to live down South full-time, or maybe you want to stick it out in the cold and spen… -
Dodging the Tax Torpedo
When envisioning the next chapter of your life, the impact of taxes can often be overlooked or forgotten altogether. The reality is, without the proper planning, you may be at the mercy of an impe… -
What Habits Should I Unlearn Before I Retire?
Today’s insightful question explores the behavioral finance side of retirement planning – specifically, which financial habits you should leave in the rearview as you transition into retirement. … -
RMDs and You
Tax-deferred retirement accounts like IRAs and 401(k)s have allowed your savings to grow without any immediate tax burden. However, once you reach a certain age, the IRS requires you to begin maki… -
How to Financially Plan for a New Presidential Administration
A new presidential administration is set to take office next year, and while there are a lot of uncertainties around what a second Trump term could bring, it’s important to stay the course in your… -
Magic Retirement Number
Do you know your magic retirement number? This is the amount of money you need to retire – and it’s different for everyone. Let’s explore how to calculate your number, how it compares to the rest …
