• Twitter
  • Facebook
  • Linkedin
  • Youtube
  • CLIENT LOGIN
  • FORMS
  • OPEN A NEW ACCOUNT
Call us today: 1-866-7500-IRA(472)
American IRA
  • ABOUT US
    • OUR TEAM
    • TESTIMONIALS
    • CONTACT US
    • CAREERS
  • SELF-DIRECTED IRA/401K ACCOUNTS
    • SELF-DIRECTED IRA – TRADITIONAL IRA
    • SELF-DIRECTED ROTH IRA
    • SELF-DIRECTED SEP IRA
    • SELF-DIRECTED SOLO 401k
    • SELF-DIRECTED SIMPLE IRA
    • SELF-DIRECTED HSA – HEALTH SAVINGS ACCOUNT
    • SELF-DIRECTED COVERDELL EDUCATION SAVINGS ACCOUNT
  • INVESTING
    • SELF-DIRECTED IRA – REAL ESTATE IRA
    • SELF-DIRECTED IRA FOR PRIVATE LENDING/NOTES
    • SELF-DIRECTED IRA FOR PRECIOUS METALS
    • SELF-DIRECTED IRA FOR PRIVATE COMPANIES
    • SELF-DIRECTED IRA FOR TAX LIENS/DEEDS
    • SELF-DIRECTED IRA FOR SINGLE MEMBER IRA LLC
    • SELF-DIRECTED IRA FOR JOINT VENTURES AND PARTNERSHIPS
    • SELF-DIRECTED IRA FOR BROKERAGE ACCOUNTS
    • SELF-DIRECTED IRA FOR OTHER INVESTMENTS
  • FEES
  • EVENTS
  • EDUCATION
    • BLOG
    • THE LOUSY INVESTOR
    • SELF-DIRECTED IRA FUNDAMENTALS
    • SELF-DIRECTED IRA – HOW IT WORKS
    • FAQs
    • CALCULATORS
    • SELF-DIRECTED IRA PROHIBITED TRANSACTIONS
    • SIGN UP
  • PROFESSIONALS
  • Menu
BLOG

Tips for Improving Your Required Minimum Distribution (RMD) Process – Part 1 of 2

February 22, 2014/in Articles, Blog, Coverdell Savings Account, Health Savings Account, Health Savings Account, Resources, Roth IRA, Self-Directed IRA, SEP, SEP IRA, Simple IRA, Simple IRA, Solo 401K, Traditional IRA, Traditional IRA /by American IRA

Required Minimum DistributionIf you are at least age 70½ this year, you may need to withdraw required minimum distributions (RMD) from your retirement account regardless as to whether it is a Self-Directed IRA or not. However, while you may have no control over the minimum amount that you must withdraw, you can implement strategies to help improve the efficiency with which your RMDs are handled.

Background

You must withdraw required minimum distribution (RMD) amounts from your retirement accounts (including any Self-Directed IRAs you have) every year, beginning with the year that you reach age 70½. An exception applies to qualified plans, such as pension and 401(k) plans, 403(b) plans and governmental 457(b) plans. Under this exception, your employer can allow you to defer starting your RMD past age 70½ until you retire. This exception can only be made for individuals who do not own more than five-percent of the business that sponsors the retirement plan.

Generally, your RMD for each year must be withdrawn by December 31. An exception applies for the year you reach age 70½ (or retire in the case of an employer sponsored retirement plan that allows you to defer your required minimum distribution (RMD) past age 70½ if you are still employed), which allows you to take your RMD as late as April 1 of the following year.

If you fail to withdraw your RMD by the deadline, you will owe the IRS an excess accumulation penalty of 50 percent of your RMD shortfall.

Note: The RMD rule does not apply to Roth IRA owners.

Tip 1: Aggregate When Suitable

If you have multiple Traditional IRAs, SEP IRAs and SIMPLE IRAs, you can take the calculated required minimum distribution (RMD) from each IRA, or you can aggregate the RMD for all of your IRAs and take the total from one or more IRAs. Aggregation of your RMDs can be useful if you have IRAs from which you do not want to make withdrawals. For instance, you may have an IRA with a specific amount that you want to leave to a certain beneficiary. In such cases, you would calculate the RMD amount for that IRA, but withdraw it from another Traditional IRA, SEP IRA or SIMPLE IRA.

This RMD aggregation rule can be done for 403(b) accounts as well. However, it cannot be done for qualified plans.

Caution: Regardless of whether you decide to aggregate your RMDs, you must calculate the amount for each IRA separately.

Tip 2: Defer RMD for Employer Plans

If you have assets in a qualified plan, and you are still employed by the plan sponsor at age 70½, check with them to determine if they will allow you to defer beginning your required minimum distribution (RMD) until you retire. If so, that would allow you the flexibility to choose whether or not you want to defer making withdrawals until you retire.

If you have assets in a 403(b) account or governmental 457(b) plan, you can defer your RMD past age 70½ until retirement.

Watch for our next blog:  Tips for Improving Your RMD Process – Part 2 of 2 for more tips to help you improve your RMD process.

 

Image by: presentermedia.com

For more information call us today at 866-7500-IRA(472)

Tags: American IRA, Blog, Required Minimum Distribution, self-directed ira
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on Linkedin
You might also like
Optimizing Retirement Savings with a Self-Directed Roth IRA How Much Do You Have Saved for Retirement?
Self-Directed Real Estate IRA Strategies to Make the Dream of Early Retirement a Reality with a Self-Directed IRA
Frequently Asked Questions About Self-Directed Traditional IRAs Frequently Asked Questions About Self-Directed Traditional IRAs
Frequently Asked Questions About Self-Directed Traditional IRAs Make Your Retirement Savings Last
Frequently Asked Questions About Self-Directed Traditional IRAs Investing in Oil and Gas in Your Self-Directed IRA
Frequently Asked Questions About Self-Directed Traditional IRAs Charlotte Ponzi-Scheme Underscores Importance of Due Diligence in Self-Directed IRA Investments
Frequently Asked Questions About Self-Directed Traditional IRAs Priorities: Retirement? Or Education
Frequently Asked Questions About Self-Directed Traditional IRAs Atlanta REIA Main Monthly Meeting March 2014 (Real Estate Investors Association)

Search

We'll Make it Simple!

A Self-Directed IRA doesn't have to be complex. At American IRA we pride ourselves on making the process easy and worry-free for our customers. Schedule a free 15-minute call with our friendly staff and we'll walk you through everything you need to know, with no obligation.

Schedule NowWhy American IRA?
Kyle MoodyBusiness Development Specialist
You'll speak with Kyle or another member of our experienced team.

Recent Posts

  • Before You Choose a Self-Directed IRA Custodian
  • What is a Self-Directed IRA for Joint Ventures?
  • Using a Self-Directed IRA Brokerage Account
  • What You Need to Get Started with Self-Directed IRA Investing
  • What to Avoid When Using Self-Directed IRAs

Get started today!

1-866-7500-IRA(472)

Proudly Serving 50 States

Contact

135 Broad Street
Asheville, NC 28801
828-257-4949

  • Twitter
  • Facebook
  • Linkedin
  • Youtube
/
© 2022 American IRA
DISCLAIMER American IRA, LLC, a North Carolina limited liability company, serves as a Third Party Administrator on behalf of the Custodian, New Vision Trust Company, a state chartered South Dakota Trust Company. As a Self-Directed IRA administrator we are a neutral third party. We do not make any recommendations to any person or entity associated with investments of any type (including financial representatives, investment promoters or companies, or employees, agents or representatives associated with these firms). We are not responsible for and are not bound by any statements, representations, warranties or agreements made by any such person or entity and do not provide any recommendation on the quality, profitability or reputability of any investment, individual or company. The terms "we" and "us" refer to American IRA, with offices located in Asheville, NC and Charlotte, NC.
5 Factors of the Self-Directed Roth IRA Conversion Decision Process Tips for Improving Your Required Minimum Distribution (RMD) Process – Part...
CLAIM YOUR FREE SELF-DIRECTED IRA GUIDE!DOWNLOAD NOW
+ +
Download Our Essential Guide to Self-Directed IRAs!

Download Our FREE Essential Guide to Self-Directed IRAs!

At American IRA, we pride ourselves on our exceptional educational materials that cater to everyone from beginners to advanced investors.

Our Essential Guide to Self-Directed IRAs is a great resource whether you’re new to investing or looking for increased diversification for your existing Traditional IRA, Roth IRA, SEP, Solo 401(k), SIMPLE, Health Savings Account, or Coverdell Education Account.

Download Now

  • Why a Self-Directed IRA?
  • How it Works
  • Investing: Popular Options
  • Real Estate
  • Private Lending
  • Tax Liens
  • Single Member LLC (a.k.a. Checkbook IRA)
  • And much more!
Share This
  • Facebook
  • Twitter
  • LinkedIn

Talk to a Specialist

Schedule a Call
Or call us free on
(866) 750-0472
Prefer email? Send us a message

Talk to a Specialist

Scroll to top