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Steve Blankenship
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Fee-Only Financial Planner
Fee-Only Financial Planner

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Important choices for your future. Proceed cautiously!

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Inheritance can be a blessing or a curse. People that fail to plan based on their heirs' strengths and weaknesses can cause a lot of harm.

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To Delay or not to Delay: When should I take my first RMD?

So, you’ve just turned 70 ½ and you have to take your first Required Minimum Distribution from your IRA. The first year that you have to take an RMD is the year that you have the greatest flexibility as far as the timing of the distribution. The IRS wants a distribution in the year that you turn 70 ½ , so anytime in that year (even if it's before the date you turn 70 ½ ) will count.

Now, the first year flexibility that you have means that you can wait until 4/1 of the year following the year that you turn 70 ½ to take the first year's RMD, however in subsequent years you will have to take it by December 31.

If you were to defer the first distribution until April 1st of the following year, keep in mind that you will have to do a second distribution in that year to satisfy your second RMD requirement. For tax planning purposes, you may not want to double up and have two taxable distributions in the same tax year, however if you have an unusually large tax liability in the first year of your RMD requirement, waiting until following year may make sense.

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