Investments | Required Minimum Distribution

TYPICAL SCENARIO
  • You have one IRA
  • RMD for current year is presented to your advisor in January 
  • Investments in IRA are sold pro-rata in January to satisfy RMD
  • 20% of RMD is withheld for federal taxes and the net amount is deposited into your checking account in February.
WEALTH HOUSE APPROACH TO RMD
We generally set our clients up with 3 separate IRA’s:
  1. Customized Buy & Hold Strategy IRA
  2. Tactical IRA
  3. Asset Protected & Growth IRA
  • RMD is calculated from each IRA in January and we total up the amounts
  • We then decide when our client needs/wants the money.  YOU KNOW YOU HAVE THE ENTIRE CALENDAR YEAR TO TAKE YOUR RMD AND YOU DO NOT NEED TO TAKE IT ALL AT ONCE.  Why pay federal tax before you have to!  Let that money work for you throughout the year.  We have various solutions to accomplish this.
  • We then decide where to take the RMD.  YOU KNOW YOU CAN SELECT FROM  WHICH ACCOUNTS AND WHICH INVESTMENTS TO SELL TO SATISFY THE TOTAL RMD.  Example:  A very highly appreciated stock is in one of the IRA’s.  We would take the “winnings off the table” and use that investment to satisfy all or part the RMD.
  • Because we implement a high level of tax management, we then calculate the appropriate federal tax to withhold from the RMD.  We do not want any negative surprises the following year when clients receive their 1099 for the RMD.
  • We then decide where you want the money to go.  Generally a portion goes to checking and a portion to an after-tax investment account (or an asset protection solution) we have established that is linked to client’s checking account.
NOTES:
  • RMD SHOULD NOT BE VIEWED AS AN AUTOMATIC ANNUAL PROCESS!
  • RMD SHOULD BE A TACTICAL ONE THAT LEVERAGES ALL OPTIONS AVAILABLE TO YOU!
  • OPTIONS THAT YOU RECEIVE IN OUR HOUSE – The WEALTH HOUSE!