February 2020

Retirement Articles This Week

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Entries in Retirement Withdrawals Age 70 1/2 (18)

Over 70 1/2?...Your MRD has been calculated...

Your employer 401k or 403b plan calculates your MRD each year.   The same calculation is done on your IRA accounts.   

Simple math, here's the calculation... they take your year end balance and divide by your life expectancy.  The calculation is approximately 4% of your account balance.  They do this calculation in January each year so you could call your your employer plan or IRA and request the funds now or wait until later this year.

 Probably makes sense to call and request your MRD amount!  You could send a check out or many plans will add your bank and send send electonically.  Pretty simple.

I have several IRA accounts...Do I have to take a MRD from each account?

Common question....If you are over 70 1/2 you can withdraw your Minimum Requred Distribution MRD from any one of your IRA accounts.  Make sure and calculate your MRD for each IRA , add those amounts up and withdraw from one singe IRA if you like.  

Also, you could merge all your IRA accounts together...your broker can transfer IRA accounts from other institutions.   

Posted on Sunday, November 23 by Registered CommenterWise Owl in | Comments Off

Over 70 1/2?... Don't forget to take your MRD

Make sure and call your IRA custodian and withdraw your MRD before year end.  And, you'll want to call your employer plan (401k or 403b) and request a withdrawal.

Posted on Wednesday, November 12 by Registered CommenterWise Owl in | Comments Off

Your Minimum Required Distribution MRD Can Go to Charity

 Above age 70 1/2?  Your 401k or IRA MRD can go to your favorite charity.  Contact the custodian of your plan and have the check sent directly to the charity.

As part of the "fiscal cliff" deal, Congress has resurrected a popular tax-law provision, known as the "IRA charitable rollover," that had expired at the end of 2011.

The rule allows many investors 70½ or older to transfer as much as $100,000 a year from an individual retirement account directly to a qualified charity without having to count any of that transfer as taxable income.

The transfer, if done properly, counts toward the taxpayer's required minimum distribution for that year.

And there still is time for some people this month to take advantage of the rule for 2012. "Charitable rollovers can be made in January 2013 for 2012, and individuals who took mandatory distributions in December 2012 can donate that money to a public charity and not have the distribution subject to tax," according to Independent Sector (independentsector.org), a Washington-based nonprofit, nonpartisan coalition of charities, foundations and corporate philanthropy programs.

Courtesy Of Wall Street Journal

Need Some Christmas Cash?...Take Your MRD!

If you have reached age 70 1/2 this year don't forget to call your IRA custodian or employer 401k or 403b plan and take your first required minimum required distribution MRD.  If you have several plans, you are allowed to  "aggregate" your IRA or 403b plans and withdraw from just one account.  

On a MRD distribution you can elect to withhold taxes or not-it's your decision.  Most plans will send out a check or transfer right to your bank account.

Posted on Monday, November 12 by Registered CommenterWise Owl in | Comments Off

Did You Turn 70 1/2 Last Year?

You can delay your first MRD until April 1st of this year.

The tax law states that you must start taking mandatory payouts (MRD) from traditional IRAs (but not from Roths) no later than April 1 of the year after the year you turn 70 1/2. So if you turned 70 1/2 in 2011, the deadline is approaching.  Call your IRA or 401k provider...they will have the calculation for you.

Age 701/2... MRD Reminder

 Age 70 1/2?  Make sure and contact your IRA custodian and request your MRD for 2011.  They have done the calculation and will send out a check or deposit the MRD in your bank account.  If you have several IRA accounts you can do the calculation on the aggregate amount of your IRA's and withdraw from just one account

Still have a 401k or 403b retirement plan?  Make the call..Many of these plans will send money out in Decmber automatically.  Call and see how your plan distributes the MRD.

Posted on Saturday, November 19 by Registered CommenterWise Owl in | Comments Off

70 1/2 MRD Reminder... 

If you turned 70 1/2 last year (2010) and did not take the mandatory withdrawal from your IRA or 401k plan...  Call your custodian and have them process by April 1st!

Posted on Wednesday, March 30 by Registered CommenterWise Owl in | Comments Off

Over 70 1/2?...Don't Forget Your MRD

Minimum Required Distribution (MRD)

If you are over age 70 1/2 it's time to add up your IRA balances, look at older 401k plans or employer plans and do the calculation.   Most IRA custodians will be able to help and even set up systematic withdrawals if  you would like to receive these distributions throughout the year. 

Make sure to call the firm holding these retirement plans and ask them to do the MRD calculation and get the check or electronic funds transfer sent out to you.

RetirementThink MRD Info and Uniform Table for the Calculation

 

Posted on Wednesday, December 1 by Registered CommenterWise Owl in | Comments Off

Your MRD Is Suspended For 2009...However You May Have Instructed Your Custodian to Send It Each Year Automatically-Call Your IRA Custodian And Check

  • Last year, Congress passed a law that provides for a one year suspension of required minimum distributions, which means you don’t have to take a distribution in 2009 if you don’t want to.
  • You’re also required to take an RMD from 401(k), profit sharing and other qualified retirement plans, so check with your accountant to determine whether your accounts are subject to the RMD rules.

Automatic Distributions. Because the penalty tax for missing a distribution is so high (50 percent of the amount you were supposed to distribute), many people have implemented automatic distribution features on their IRAs.   And often those distributions are made in the fourth quarter of the year. Generally, this is a good idea and ensures you don’t miss your RMD.

But if you don’t need the RMD this year, then you’ll most likely have to inform your IRA custodian that you want to suspend the automatic distribution for 2009. Otherwise, you may end up paying taxes you could have avoided.

  • But because the RMD has not been suspended for 2010, if you like the automatic RMD feature, you want to be sure that it is suspended for 2009, but still in place for 2010.

CBSMoneywatch.com Year End Tax Saving Tip For Retirees

 

Posted on Tuesday, September 29 by Registered CommenterWise Owl in | Comments Off

New 2009 MRD Rules Are Confusing

A new tax law lets IRA and other retirement-account holders skip MRD withdrawals this year. Here's how it works:

  • You can still take a withdrawal in 2009, but you don't have to. You would owe income tax on any withdrawal of pretax contributions and earnings from a tax-deferred account.
  • The law applies to traditional IRAs, inherited IRAs, inherited Roth IRAs, 401(k)s, Roth 401(k)s, and other defined-contribution employer plans.

If you've set up automatic distributions from you IRA or 401k you'll want to call your custodian and suspend those MRD withdrawls.

A number of IRA custodians are trying to establish procedures, especially for investors who receive automated payments each year from their retirement accounts, that will allow account holders to suspend or trim required minimum withdrawals. But some don't plan to send letters outlining changes for 401(k) holders until April. In the meantime, some custodians are still mailing checks -- even to retirees who may not want them. Other custodians are stopping payments unless account owners ask for the funds.

There is a backstop for retirees: the "60-day rule." IRA owners can generally roll unwanted withdrawals back into their accounts, as long as they do so within 60 days. To do so, you can simply write a check to the IRA custodian for the same amount you received. You're allowed to do one rollover per account once every 12 months. Otherwise, the distribution is taxed. It's not uncommon for people to miss that deadline, and the IRS in recent years has been reluctant to approve requests for extensions.

Courtesy of WSJ.com

 

Posted on Sunday, February 15 by Registered CommenterWise Owl in | Comments Off

No MRD For 2009...Here's An Exception


We've been getting a lot of inquiries on the new MRD rules for 2009 and received a frequent question. Fortunately, a recent issue of the Wall Street Journal provides the answer:

If I turned 70½  in 2008 and had planned to take my first withdrawal by the April 1, 2009 deadline, does the new law permit me to skip it?

A: No. The law suspends distributions only for 2009. Although first-timers are allowed to delay 2008's distribution until April 1, 2009, the withdrawal still counts toward your obligation for 2008, Mr. Slott says. So, if you turned 70½ in 2008 and decided to wait until April 1, 2009, to make your first withdrawal, that deadline still applies. To calculate this distribution, you would use your account balance as of Dec. 31, 2007.

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