Cover of Your RMD Is Higher Than 4%, Should You Be Worried? | EP 92

Your RMD Is Higher Than 4%, Should You Be Worried? | EP 92

Your RMD Is Higher Than 4%, Should You Be Worried? | EP 92

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Summary
 What happens when your required minimum distribution is higher than the amount your retirement plan says you can safely withdraw? Does that mean you are overspending, or putting yourself at risk of running out of money?For many retirees, a large RMD can feel like the IRS is forcing them to break the 4% rule or abandon their safe withdrawal strategy. But a required minimum distribution is a withdrawal requirement, not a spending requirement. Money may have to leave your traditional IRA or retirement account, but it does not have to leave your financial plan.In this episode of Make It Personal, we explain what to do when RMD rules and safe withdrawal guidelines appear to collide. You’ll learn why an RMD does not automatically increase your lifestyle spending, how excess distributions can be reinvested in a taxable brokerage account, and how proactive tax planning may help manage future required withdrawals.We also discuss partial Roth conversions, qualified charitable distributions, retirement taxes, and why flexible income planning matters more than following one rigid formula. Retirement rules may apply broadly, but your income needs, tax situation, goals, charitable priorities, and definition of financial security are personal.What You’ll Learn:→ Why withdrawal and spending are different: An RMD determines how much must be distributed from a qualifying retirement account. It does not require you to use the entire amount for living expenses.→ How to reinvest an excess RMD: When a distribution is larger than your spending needs, the remaining after-tax money may be invested in a taxable account so it can continue supporting your long-term plan.→ How earlier tax planning may help: Thoughtful partial Roth conversions before RMDs begin may reduce future pre-tax account balances and create additional tax diversification, although the conversion itself can generate taxable income.→ How charitable giving can satisfy an RMD: Eligible IRA owners may use qualified charitable distributions to send money directly to qualifying charities, satisfy part or all of an RMD, and support causes that reflect their values. (IRS)Your appropriate strategy depends on your accounts, income, tax bracket, Medicare considerations, estate plan, goals, and charitable intentions. Coordinate major retirement and tax decisions with qualified financial and tax professionals.Connect with Mutual of Omaha Advisors through the following links:→ Download The Game of the Decade eBook: https://makeitpersonalpodcast.com/free-ebook-page-2→ Download the Seven Principles eBook: https://makeitpersonalpodcast.com/free-ebook-page?utm_source=podcast&utm_medium=allplatforms&utm_mediacode=FCF&utm_campaign=makeitpersonal→ Instagram: https://www.instagram.com/makeitpersonal_podcast/→ Facebook - Mutual of Omaha Advisors: https://www.facebook.com/MutualofOmahaAdvisorsFB→ Sign Up For a Free Financial Strategy Meeting: https://makeitpersonalpodcast.com/get-connected/?utm_source=podcast&utm_medium=allplatforms&utm_mediacode=FCF&utm_campaign=makeitpersonal--Investing involves risk, including loss of principal. This podcast is for educational purposes only and may include references to concepts that have legal and/or tax implications. Mutual of Omaha Investor Services, Inc. does not provide tax or legal advice. Please consult with the appropriate professional regarding your personal situation prior to making any financial decisions. Strategies discussed may not be suitable for everyone. Securities and advisory services offered through Mutual of Omaha Investor Services, Inc. Member FINRA/SIPC. Mutual of Omaha Advisors is a division of Mutual of Omaha Insurance Company.
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