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Required Minimum Distributions

If you are 70 ½ in 2018 and have an IRA, you must take your “required minimum distribution” (RMD) by year-end.  Your RMD is calculated by dividing your IRA balance as of December 31 of the previous year by the applicable distribution period or life expectancy.  This rule does NOT apply to Roth IRAs and there are different calculations if you are the beneficiary of an IRA.  Your account custodian will make the calculations for you but if you have any questions, please give us a call and let us help answer them.

Even if you are still working, both business owners and employees who are 70 ½ in 2018 must take their RMD from their SEP-IRA or Simple-IRA.

Qualified Charitable Distributions

A qualified charitable distribution is a taxable distribution from an IRA owned by an individual who is age 70 ½ or over that is paid directly from the IRA to a qualified charity. This opportunity does not apply to a SEP IRA or SIMPLE IRA.

Your qualified charitable distributions can satisfy all or part of the amount of your RMD.  For example, if your 2018 RMD is $20,000 and you make a $10,000 qualified charitable contribution for 2018, you would have to withdraw another $10,000 to satisfy your 2018 RMD.  You may give up to $100,000 to a qualified charity from your IRA in any year as long as you are 70 ½ in that year.

At Strategic Wealth Planning, we develop personal financial blueprints for our clients that safeguard their families, strengthen their business or professional practice, and preserve and enhance their estates. At SWP, education is an important part of the adviser/client relationship because it ensures that a client thoroughly understands all available options. For a confidential meeting or for a second option, call 214.727.6000.

 

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