2 minute read
Make the most of your RMDs
You’ve spent most of your life saving for your retirement. At some point, most of us reach the age where we must make Required Minimum Distribution (RMD) annual withdrawals. An RMD is the amount you must begin withdrawing from your IRA or other qualified account. For people born between 1951-1959, RMDs usually must start at age 73.
Most retirement funds are tax deferred, fully taxable at withdrawal and subject to RMDs. An exception is the Roth IRA, an individual retirement account that offers tax deferred growth and tax-free withdrawals in retirement and is not subjected to RMDs. You will want to consider how to use your RMD wisely. You will have plenty of options:
Use your RMDs to pay for living expenses. This can make sense especially if you’re retired. Although RMDs are usually taxed as ordinary income, it’s often possible to avoid moving into a higher tax bracket.
Reinvest or save your RMDs. Extra savings can reinforce your retirement goals. If you’re still working, you may be able to roll an old account into one offered by your current employer. There also are special annuities that can avoid RMDs until age 85.
Provide additional security for your loved ones through life insurance using your RMDs. The insurance death benefit could, for example, cover taxes your heirs would owe if they inherited part of your IRA or other qualified account.
Make a charitable donation with your RMDs. There are many ways to do this, and the deduction from the gift could lower your taxes.
The choice is yours, but we're here to help.
Talk to your agent or contact Gleaner Life Insurance Society at 800.992.1894.
