Podcasts Business Investing Your Money, Your Wealth 6 Ways to Reduce Your Required Minimum Distributions - 59

6 Ways to Reduce Your Required Minimum Distributions - 59

Published: Aug. 27, 2016, 5 p.m.

Did you know there are strategies you can use to reduce your required minimum distributions (RMDs) from your individual retirement account? In episode 56 of the YMYW podcast, find out six ways to do this so you can keep more of the money you've earned, saved, and invested through your entire working life. Original publish date August 27, 2016 (hour 1). Note that content may be outdated as rules and regulations have changed.

00:00 - Intro

01:45 - \u201cOnce you turn 70 \xbd, you have to start pulling money out of an IRA (individual retirement account). If you are 70 \xbd and still working, and own less than 5% of the company, you can delay your required minimum distribution until you retire.\u201d

04:13 - \u201cOnce you turn 59 \xbd you can withdraw money from your tax-deferred accounts without paying a 10% penalty.\u201d

06:54 - \u201cA lot of people don\u2019t realize that you can do these Roth conversions even before 59 \xbd. You could be any age and do a conversion.\u201d

10:45 - \u201cThis is a valid way to reduce your RMDs \u2013 invest in a QLAC (quality longevity annuity contract).\u201d

12:20 - \u201cYou can invest in your IRA up to 20% of your IRA or 401(k) or $125,000 \u2013 whichever is less.\u201d

13:04 - \u201cAnother way to lower your RMDs is to use tax-deferred accounts for bonds and bond funds, and use taxable accounts for stocks and stock funds.\u201d

16:30 - \u201cIf you invest in stocks outside of your retirement accounts and you hold a stock or stock mutual fund for at least a year and you sell it, it\u2019s subject to a special long-term capital gain rate.\u201d

23:38 - \u201c(Another option is to) donate your required minimum distributions.\u201d

29:42 - \u201cA lot of men and women are living into their nineties and hundreds\u2026if you haven\u2019t really thought this through, it sort of messes up your retirement plan.\u201d

32:30 - \u201cIf we\u2019re living a lot longer, how do we adjust our retirement plans to be able to accommodate that?\u201d

34:43 - \u201cThe old rule used to be \u2018save 10% of your income.\u2019 A lot of advisors are now saying 15%, that\u2019s what we say.\u201d