Fill two needs with one deed by applying some art to taking required minimum distributions
from retirement accounts.
Traditional IRAs impose required minimum distributions
that you must take once you reach age 70 1/2.
Currently, beneficiaries have the option of taking an inherited IRA via a lump sum or through stretching, which allows them to take required minimum distributions
based on their life expectancy.
These distributions are called required minimum distributions
(RMDs) and are based on annuity tables.
Under the new law, taxpayers who must begin taking required minimum distributions
from an IRA at age 70.
Your beneficiaries will have required minimum distributions
(RMDs) from the inherited IRA, and those distributions probably will be taxable.
With an HSA paired with an HDHP, employees may put aside money each year for health care, yet take no required minimum distributions
(RMDs) from those accounts, and the savings can remain invested and continue to grow.
Yes, by doing so, the client will pay higher taxes, but he said it makes sense because "when you start taking Social Security, you'll have lower Social Security taxes, and you will have lower required minimum distributions
because you've taken out" of the IRA or 401(k) first.
Currently, with traditional IRAs and qualified retirement plans, individuals typically must begin taking required minimum distributions
(RMDs) no later than age 70 A'.
Jeffrey Brown, University of Illinois at Urbana-Champaign and NBER; James Poterba, MIT and NBER; and David Richardson, TIAA-CREF, "Do Required Minimum Distributions
Constrain Household Behavior?
More than half (57 percent) do not know that 70V2 is the age at which required minimum distributions
from traditional IRAs and 401 (k) plans must begin.
Required minimum distributions
are minimum amounts that a retirement-plan account owner must withdraw annually starting with the year that he or she reaches 70 1/2 years of age or, if later, the year in which he or she retires.