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With trillions of dollars in assets, IRAs have proven themselves to be a popular and effective way to save for retirement. Eventually, however, you will need to start taking some money out of (and paying taxes on) your IRAs.
The IRS requires that you take a minimum distribution from your IRA and other retirement accounts every year starting no later than April 1, of the year after the year you turn age 70 1/2. This means if your birthday was on or before July 1.
Most IRA custodians will do this calculation for you, but for planning purposes it can be helpful to estimate in advance what your Required Minimum Distribution (RMD) may be. Although you may take your entire IRA RMD from one IRA or a combination of them, you will need to tally up the year end balances for ALL your IRAs in order to do an accurate calculation.
To see what your IRA RMD for 2019 might be, click here: IRA RMD Calculator
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Adding money to an IRA is easy. Knowing when and how to take money out of an IRA while complying with all the rules and regulations surrounding IRAs and retirement plans — that is the tricky part.
All IRA owners must begin taking Required Minimum Distributions or RMDs from their IRA by April 1 of the year after the year they turn 70 ½.
But the rules don’t stop there.
This article, written by Ed Slott IRA Analyst, Sarah Brenner, originally ran on The Slott Report.
You can learn more about IRAs from Ed Slott and his team, by clicking here.
The personal savings rate in the United States hit 6% in 2018. Relatively speaking that’s not a bad number. Unfortunately, it probably won’t get you to your long-term financial goals.
It may sound obvious, but if you want to have more money when you retire, you are going to have to save more money when you are working.
Fortunately, the annual limits on how much you can contribute to your IRA, 401k and other workplace retirement savings plans are pretty generous. What’s more, they’ve been increased for 2019.
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Many of my clients use dividends as part of their long-term retirement income plan. Dividends provide consistent, recurring income that often rises with inflation.
Even clients who are still in the “accumulation phase” of their investment plan can benefit from owning stocks and mutual funds that pay dividends.
Click here to see how.
The Tax Cuts and Jobs Act of 2017 doubled the standard deduction eliminating the need for many taxpayers to itemize their tax deductions. It also made permanent an IRA distribution strategy known as the Qualified Charitable Distribution or QCD.
If you are over 70 ½, own an IRA, and make financial contributions to qualified charitable organizations, the QCD may have a role in your IRA distribution plan.
First some basics…