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Edd

Rmd Strategy

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Hello. I recently read of this strategy and would like your opinion. I have not heard it before, has anyone else or do you know of anyone who has tried it?

 

The suggested strategy is to take out large portions of the 403b/IRA/401K during your 60s prior to being required. Perhaps over 8 years not in one move. Of course, pay the tax accordingly each year. Put the money each year into a highly tax efficient fund/s such as ETFs and recreate a well balanced portfolio. The idea is basically that the taxes will be easier to pay the younger one is rather than post 70.

 

Has anyone heard of this or do you know of anyone doing this?

 

Thanks,

Edd

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Guest Joel L Frank

What does age have to do with one's financial ability to pay income tax? Moreover, are you still working during your sixties? If you are, those distributions will just add to your earned income and place you in a higher tax bracket. No?

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Hello. In my case, I do not expect to still be working in my 60s, rather living on my teacher pension, will will drop my final salary to about 75% of what it was. Age, I suppose, does not have anything with the ability to pay taxes. However, if there is need to work a bit to pay some annual tax in this strategy, I would be prefer to work at 65 rather than 75, for example. Other than that, I do no know why paying younger would be better than paying older.

 

Thanks,

Edd

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