Congratulations!
You’ve reached that magical life milestone where the IRS comes knocking and asks you to start taking Required Minimum Distributions or RMDs from your IRA accounts. Now what?
You’ve spent your entire life thinking of those accounts as untouchable assets and now you must take money out. Don’t fret – We can help you develop a strategy for taking your RMDs.
Start at the Beginning – Spending
To develop a strategy for taking your distributions, it is best to first consider your spending patterns. This is rarely a favorite activity of anyone, but first we need to understand if your spending is “lumpy” meaning you have large financial obligations sporadically or consistent. The easiest way to tackle this process is to gather a year’s worth of credit card and bank statements and track the cash flows on a month-by-month basis. Once you understand the outflows and their timing, we can tailor a distribution strategy to make that process simpler.
One Size Doesn’t Fit All – And That’s a Good Thing
If you are a disciplined saver who knows your budget inside and out, an annual RMD might be the simplest option. Many clients find success in this strategy by holding the proceeds in a savings account. They then draw from that account as they need the funds to pay items such as estimated taxes and property taxes, etc.
For clients that prefer more structure around covering periodic expenses, a quarterly or semi-annual distribution schedule can work quite well. We can plan to have those distributions in your account in advance of those large ticket items to eliminate stress and make the payment process more seamless.
For those newer to retirement or still accustomed to receiving a regular paycheck, we suggest aligning your RMDs with a client’s cash flow needs. In this strategy, you’re essentially paying yourself. We can set up monthly or bi-monthly distributions to your bank account.
Bottom Line – It’s about YOU!
At the end of the day, your strategy around taking your Required Minimum Distributions should work for you, not the other way around. Our goal is to simplify your financial life and reduce stress so you can focus on what really matters!
Investment Advisory Services offered through Expressive Wealth, LLC. All investing involves risk, including the potential loss of principal. Market volatility may significantly impact the value of your investments. This communication is provided for informational purposes only and should not be construed as personalized investment advice or a recommendation of any particular security, strategy, or investment product. Information has been obtained from sources believed to be reliable, though not independently verified. This report does not represent a specific investment recommendation. The opinions and analysis expressed herein are based on Expressive Wealth research and professional experience and are expressed as of the date of this report. We recommend consulting with a qualified financial adviser to develop a strategy that aligns with your financial goals and risk tolerance.