Thank you. Roll the video back a few seconds: $650,000 divided by the life expectancy (in that case, 26.5). This means the RMD for that year would be $24,528.30 -- or roughly 3.77% of the account balance. Hope that helps.
Thank you Tom for this video and the tip about being able to take the RMD out of one IRA brokerage account when one has multiple IRA brokerage accounts. I do have one question about this when one of the IRA accounts contain an annuity which provides taxable income. I'm hoping that I don't have to do anything fancy but just include that income in my RMD bucket and just grab the required remainder from other IRAs in the other brokerages Thanks again. This is my first RMD because I turned 73 after April 1st this year.
@davebeck4734 thank you for the comment. All money coming out of an IRA will be considered ordinary income. If held outside an IRA, a distribution from an annuity would be "part principal, part ordinary income," but any distribution from an IRA will be ordinary income. If you're at a point where you cannot take a distribution yet from the annuity inside your IRA, or if there is some other strategy at work, just know you can take the entire RMD, the required minimum distribution (as mentioned in the video) from another IRA. Regular viewers of our videos (and podcast listeners) may probably pick up on the fact we're not big fans of owning annuities inside tax-deferred accounts like IRA's. Yet, billions of dollars of annuities get sold each year in this way (into IRA's). We have yet to receive a good response to the question, "why put a tax-deferred investment (an annuity) inside a tax-deferred account?"
RMD confusion, last year I inherited my sisters 401K. I rolled it over to my financial account into an IRA. I was told at the time that I need to spend it within the next 10 years, and I could do a little each year or wait and take more one year then other year and so on as long as it's gone in 10 years. Recently I was told that the Secure Act 2.0 had changed and that I was required to take out an RMD or I would get penalized 25%. I'm only 58 and still working and don't want to take the money out if I don't need to. I spoke to my financial institute, and they tried explaining it to me, but I'm still confused. Could I get your spin on this?
Table 1 is single life expectancy - used by (for) beneficiaries. Table 3 is for use by unmarried owners, married owners whose spouses aren't more than 10 years younger, and married owners whose spouses aren't the sole beneficiaries of their IRA. See www.irs.gov/publications/p590b
Thank you very much for the detailed information on how to calculate the RMD. Excellent. Thank you again.
Glad it was helpful!
Hi Sir ! Great video by the way. I'm just wondering how is the 3.77% calculated at 1:33.
Thank you. Roll the video back a few seconds: $650,000 divided by the life expectancy (in that case, 26.5). This means the RMD for that year would be $24,528.30 -- or roughly 3.77% of the account balance.
Hope that helps.
Thank you Tom for this video and the tip about being able to take the RMD out of one IRA brokerage account when one has multiple IRA brokerage accounts. I do have one question about this when one of the IRA accounts contain an annuity which provides taxable income. I'm hoping that I don't have to do anything fancy but just include that income in my RMD bucket and just grab the required remainder from other IRAs in the other brokerages
Thanks again. This is my first RMD because I turned 73 after April 1st this year.
@davebeck4734 thank you for the comment. All money coming out of an IRA will be considered ordinary income.
If held outside an IRA, a distribution from an annuity would be "part principal, part ordinary income," but any distribution from an IRA will be ordinary income.
If you're at a point where you cannot take a distribution yet from the annuity inside your IRA, or if there is some other strategy at work, just know you can take the entire RMD, the required minimum distribution (as mentioned in the video) from another IRA.
Regular viewers of our videos (and podcast listeners) may probably pick up on the fact we're not big fans of owning annuities inside tax-deferred accounts like IRA's. Yet, billions of dollars of annuities get sold each year in this way (into IRA's). We have yet to receive a good response to the question, "why put a tax-deferred investment (an annuity) inside a tax-deferred account?"
RMD confusion, last year I inherited my sisters 401K. I rolled it over to my financial account into an IRA. I was told at the time that I need to spend it within the next 10 years, and I could do a little each year or wait and take more one year then other year and so on as long as it's gone in 10 years. Recently I was told that the Secure Act 2.0 had changed and that I was required to take out an RMD or I would get penalized 25%. I'm only 58 and still working and don't want to take the money out if I don't need to. I spoke to my financial institute, and they tried explaining it to me, but I'm still confused. Could I get your spin on this?
There is so much confusion on this topic, and poor guidance. Look for a video on this topic, coming soon.
@johnmurphy7830: And here is the answer to your question, Episode 375: ua-cam.com/video/BAUs4SFuBkM/v-deo.html
would you use Table 1 on an inherited IRA inherited by nonspouse in 2021?
Table 1 is single life expectancy - used by (for) beneficiaries.
Table 3 is for use by unmarried owners, married owners whose spouses aren't more than 10 years younger, and
married owners whose spouses aren't the sole beneficiaries of their IRA.
See www.irs.gov/publications/p590b