You are receiving this email because you signed up to receive Bob Carlson's free e-letter Retirement Watch Weekly, or you purchased a product or service from its publisher, Eagle Financial Publications. [Carlson's Retirement Watch Weekly] [Retirement Reports](www.retirementwatch.com/retirement-resources/) [Retirement Articles](www.retirementwatch.com/retirement-articles/) Brought to you by Eagle Financial Publications How to Calculate the Required Minimum Distribution (RMD) by Bob Carlson
Editor, [Retirement Watch]( 10/15/2023 SPONSORED [URGENT: âSecond Waveâ of A.I. Investments Ready to Pop](
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[image]( Congress is spurring on the most dangerous retirement threat of the last 50 years. Americaâs top retirement researcher reveals the deadly truth behind this government move... plus the ONLY way to fully protect your wealth in the coming months. [Click Here for the Full Story.]( [CLICK HERE...]( Keep in mind that Roth IRAs are not subject to required minimum distributions until the original account ownerâs has passed and should not be included in the total. The entire aggregated RMD can be taken from one IRA. It can be taken proportionally from each, or an equal amount can be taken from each IRA. Or any other allocation you think of can be taken as long as the total at least equals the aggregate RMD for the year. Some people use the aggregation method to re-balance their portfolios or make it easier to manage their IRAs in the future. For example, suppose a person owns two IRAs, and one IRA owns predominantly stocks that have appreciated a lot and another IRA owns other investments that havenât done as well. The owner can take all of the RMD from the IRA that owns mostly stocks. That brings the ownerâs overall asset allocation closer to where it was at the beginning of the year, so it is less overweighted to stocks. Other people decide to simplify their financial lives by reducing the number of IRAs they have. So, they take all their RMDs from one IRA until it is depleted and can be closed. The aggregation method can be used only with traditional IRAs. With 401(k)s and other employment-related accounts, you compute the RMD separately for each account and must take the RMD from that account. When you take an RMD, you donât have to sell an investment and distribute cash. You can have the IRA distribute shares of stock or mutual funds or whatever other investments it owns. You have to be sure the value of the property distributed at least equals the RMD for the year. The value of the property on the date of each distribution is used to compute the amount of the distributions for the year and is the amount included in gross income. It doesnât matter if the value of the property appreciates or declines after the distribution date. Taking a distribution of property instead of cash ensures that your money stays invested until you need to spend it. When you take a distribution of property, the tax basis in the property is its fair market value on the date of the distribution. When you eventually sell the property, youâll owe capital gains taxes only on the appreciation that occurred after the distribution. You can take RMDs in fixed installments during the year or at irregular intervals. Some people have their IRA custodians send them monthly checks of equal amounts that total at least the RMD for the year. How to Calculate the Required Minimum Distribution: Key Takeaways
- The required minimum distribution for the year is computed by dividing the account balance on the previous yearâs December 31 by the life expectancy factor from tables published by the IRS.
- There are three life expectancy tables in IRS Publication 590-B. The taxpayer must be sure to use the right table for his or her situation.
- When an individual has multiple traditional IRAs, the aggregate RMD for all the IRAs can be taken from the IRAs in any proportion the individual wants.
- Employee based retirement accounts and inherited IRAs cannot be aggregated. Required minimum distributions must be computed for each account and withdrawn from each account.
- RMDs donât have to be made in cash. To a better retirement,
[Bob Carlson]
Bob Carlson
Editor, Retirement Watch Weekly Editorâs Note: If things feel a little weird right now in America, you may want to brace yourself for a brand-new shock to the system. Find out what's being planned in Washington, D.C at this moment, and the potentially damning implications for your retirement. [Click here for the full briefing.]( SPONSORED [Warning: America on the Brink of Financial Crisis!](
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[Avoiding Expensive IRA Mistakes]( New to the Retirement Watch Community: SeniorResource.com Unfortunately, one in ten older adults has dementia. If youâre a senior, you may worry that youâll develop memory disorders as you age. But how can you tell the difference between normal age-related memory loss and dementia? [Click here]( for some early warning signs that you may be on your way to a memory disorder. About Bob Carlson: [Bob Carlson]Robert C. Carlson is the author of the books The New Rules of Retirement and Retirement Tax Guide, editor and investment director of the popular retirement newsletter, Retirement Watch, and editor of the free weekly e-letter, Retirement Watch Weekly. Bob is a frequent speaker at investment conferences around the country, and you can also hear Bob as a featured guest on nationally-syndicated radio shows, such as The Retirement Hour, Dateline Washington, Family News in Focus, The Michael Reagan Show, Money Matters and The Stock Doctor. About Us:
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