Gary Shor, one of AEPG’s Senior Financial Planners, was quoted in Financial Advisor magazine, “Putting RMDs to Work,” on June 1. The article raises the point that distributions and Required Minimum Distributions (RMDs) from IRA accounts need a strategy.
Gary was quoted as saying ”some clients use RMDs to pay off living expenses or pay down high mortgages. Others use the distributions to fund their grandchildren’s 529 college savings plans. Whether the tax deferrals received on the 529 plan contributions offset the taxes incurred on the clients’ RMDs depends on their tax bracket.”
Gary also said, “Sometimes clients opt to take in-kind distributions (taking the distribution in the form of the securities held in the retirement plan, rather than in cash), which they slide over to an institutional brokerage account.” Gary also noted that Individuals may also bump up their federal withholding tax on RMDs they take at the end of the year in order to make up for and avoid penalties for failing to pay enough in estimated taxes during the year. “You can withhold up to 100% on RMDs if the custodian allows this,” he says. This strategy can be employed with RMDs from 401(k) plans, IRAs and inherited retirement accounts.”
Read the full article here: