Goldstein on Gelt

Understanding RMDs: A Simple Explanation


Listen Later

Are you approaching the age of 73 or have inherited an IRA account? If so, understanding Required Minimum Distributions (RMDs) from IRAs is crucial. In a recent episode of The Goldstein On Gelt Show, Douglas Goldstein discussed RMDs in detail and answered a listener letter regarding RMDs for inherited IRAs. Here's a summary of the key points to help you navigate RMDs and avoid potential penalties.

What Are RMDs?

RMDs are the IRS's way of ensuring that the funds in your IRA, which have grown tax-deferred over the years, are eventually taxed. Once you reach the age of 73, the IRS mandates that you withdraw a certain amount from your traditional IRA each year. This amount is determined by a formula based on your age and the total value of your IRA at the end of the preceding year.

Inherited IRAs and RMDs

If you have inherited an IRA from a someone, you might also be subject to RMDs. In the case of an inherited IRA, the IRS requires beneficiaries to withdraw the entire amount within a specific timeframe, usually within ten years of the original account holder's death.

Penalties for Failing to Take RMDs

It's essential to stay on top of your RMDs to avoid potential penalties. For instance, failing to take your RMD can result in a 50% tax penalty on the amount you were supposed to withdraw. However, recent legislation has reduced this penalty to 25% or even 10% under specific conditions.

Donating RMDs to Charity

One strategy to potentially reduce the tax impact of RMDs is to donate the withdrawn funds directly to a qualifying charity. This can potentially help reduce your tax burden while supporting a cause you believe in.

What should you do?

Seek professional advice to ensure your portfolio complies with IRS regulations, and to make sure you are informed about any changes in relevant legislation. 

If you're living outside the United States and need personalized financial guidance, reach out to Profile Investments Services, Ltd. Profile specializes in assisting individuals outside the United States with U.S. investment accounts.

Subscribe to the Profile and Goldstein On Gelt email lists for more valuable financial tips and updates.

...more
View all episodesView all episodes
Download on the App Store

Goldstein on GeltBy Douglas Goldstein | CFP® | Profile Investment Services

  • 4.9
  • 4.9
  • 4.9
  • 4.9
  • 4.9

4.9

30 ratings


More shows like Goldstein on Gelt

View all
Money Guy Show by Brian Preston and Bo Hanson

Money Guy Show

3,184 Listeners

The Stacking Benjamins Show by StackingBenjamins.com | Cumulus Podcast Network

The Stacking Benjamins Show

1,990 Listeners

Talking Real Money - Investing Talk by Don McDonald

Talking Real Money - Investing Talk

736 Listeners

Retirement Answer Man by Roger Whitney, CFP®, CIMA®, RMA, CPWA®

Retirement Answer Man

1,282 Listeners

Rich As A King by Douglas Goldstein | CFP® | Profile Investment Services

Rich As A King

19 Listeners

The Ben Shapiro Show by The Daily Wire

The Ben Shapiro Show

153,290 Listeners

Afford Anything by Paula Pant | Cumulus Podcast Network

Afford Anything

3,534 Listeners

The Commentary Magazine Podcast by Commentary Magazine

The Commentary Magazine Podcast

5,124 Listeners

4-Minute Money Ideas by Douglas Goldstein | CFP® | Profile Investment Services

4-Minute Money Ideas

0 Listeners

Big Picture Retirement® by Devin Carroll, CFP® & John Ross, JD

Big Picture Retirement®

525 Listeners

Stay Wealthy Retirement Podcast by Taylor Schulte, CFP®

Stay Wealthy Retirement Podcast

663 Listeners

BiggerPockets Money Podcast by BiggerPockets

BiggerPockets Money Podcast

3,068 Listeners

The Q & A with Rabbi Breitowitz Podcast by Rabbi Dr Yitzchak Breitowitz

The Q & A with Rabbi Breitowitz Podcast

231 Listeners

For Heaven's Sake by Shalom Hartman Institute

For Heaven's Sake

434 Listeners

Call Me Back - with Dan Senor by Ark Media

Call Me Back - with Dan Senor

3,042 Listeners

Honestly with Bari Weiss by The Free Press

Honestly with Bari Weiss

8,604 Listeners

What's Your Number? by Ark Media

What's Your Number?

85 Listeners