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03-17-2020 05:07 PM
In 2009 they waived the RMD requirement so they might do it again this year. Doesn't help people who have already taken theirs this year
03-17-2020 05:37 PM
RMD's: You do not have to sell the stocks in your IRA. You can transfer them out to another account with the same broker. You do have to pay tax though....we use the cash dividends for that purpose. The transferred stocks continue to grow or we will sell them when they bring in a better price.
Check with your broker. We have done this transfer and tax payment from dividends for several years.
03-17-2020 05:41 PM - edited 03-17-2020 05:43 PM
As for leaving IRA money to future generations, I'm not sure that's doing them much of a favor.
New rules require those who inherit retirement funds to take out and pay tax on the money during a specified period, instead of spacing out their withdrawals over their projected lifetimes, as the old rules allowed. This could send them into a higher tax bracket fairly easily.
(Someone more knowledgeable might contradict me if I'm wrong about this.)
I can accept the fact that the IRS wants to get the deferred taxes owed on money that we put into retirement funds, but to stick my kids with a shortened withdrawal period doesn't seem very nice to me.
But since when are IRS rules "nice" to people?
03-17-2020 05:54 PM - edited 03-17-2020 05:58 PM
@novamc1 wrote:
As for leaving IRA money to future generations, I'm not sure that's doing them much of a favor.
New rules require those who inherit retirement funds to take out and pay tax on the money during a specified period, instead of spacing out their withdrawals over their projected lifetimes, as the old rules allowed. This could send them into a higher tax bracket fairly easily.
(Someone more knowledgeable might contradict me if I'm wrong about this.)
I can accept the fact that the IRS wants to get the deferred taxes owed on money that we put into retirement funds, but to stick my kids with a shortened withdrawal period doesn't seem very nice to me.
But since when are IRS rules "nice" to people?
---
This is true. In most cases, the beneficiaries (children) of the deceased will be in their highest earnings (and highest tax bracket) years, generally in their 50s or 60s.
The children of these beneficiaries will generally be young adults, and therefore no longer tax deductions.
The government has figured out a way to get the maximum tax benefit from the savings of retired people.
--edited to add: these are generalities, and certainly not applicable to every case.
03-17-2020 07:57 PM - edited 03-17-2020 08:02 PM
@Highlands72 @novamc1 I'm concerned about future generations; not my son or even grandson.
Have huge concerns about a niece in her 30's and a job which she loves, but is unstable. She may need a lot of financial help in her future. I'd rather she have the money than the government insist I take a "minimum" amount of several accounts each year which are reinvested again. I don't need it or want it at this point in my life.
At some point, I may need it if in Skilled Care. IDK; no one knows what that will cost when we'll need that kind of help. It was around $15,000/month when my mom was in Skilled Care. She passed away in 2017.
Edited: My legal documents are up-to-date; my son, DIL and grandson are well covered; although as mentioned above, they don't need the additional income or taxes incurred with my death. However, it happens when parents pass away to most of us; we pay additional taxes.
The above is simply my opinion about government laws!
03-17-2020 08:04 PM
@jlkz wrote:RMD's: You do not have to sell the stocks in your IRA. You can transfer them out to another account with the same broker. You do have to pay tax though....we use the cash dividends for that purpose. The transferred stocks continue to grow or we will sell them when they bring in a better price.
Check with your broker. We have done this transfer and tax payment from dividends for several years.
You do not have to sell the stock and yes you can transfer the stock to another account BUT you do have to pay taxes on the amount that you are transfering as your calculated RMD. You pay taxes on the RMD it doesn't matter where the money goes or in what form (cash stock etc)
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