How to Calculate Your Required Minimum Distribution

[@coloradomark2159]

You made this an easy explanation. This really made my anxiety disappear. Simplicity! Thx.

[@davidfolts5893]

Thanks for all the excellent content you produce. It is very well done!

[@mulloolyassetmanagement]

Glad you enjoy it!

[@bill7168]

Thank you for the concise explanation! I came here seeking information on how the RMD's were scheduled and your explanation was exactly what I was looking for. Thank you!

[@mulloolyassetmanagement]

Glad it was helpful!

[@Adventure2wheels]

Thank you, I've been trying to figure this out and what to expect as I get near my RMDs.

[@mulloolyassetmanagement]

Glad it was helpful!

[@SurfCityBill]

Here's a scenario that crossed my mind. Assume a person has a $10,000 balance in their acct on Dec 31. The next year the account drops significantly enough that the balance left is below what the RMD value is for that year. What happens? Is the account simply liquidated upon the RMD distribution?

[@mulloolyassetmanagement]

You have it right. The required MINIMUM distribution for the current year is calculated based on the value of the account on 12/31 of the year before. There's nothing stopping folks from taking the entire balance.

[@PTMcMullen]

​​​@@mulloolyassetmanagement I don't think that answers the question. The person hasn't withdrawn ANY funds, and market declines have reduced the asset values below the RMD amount, so he CANNOT withdraw the required minimum amount.

[@shanew7361]

My father died in October 2022. My parents filed their 2021 taxes late with an extension shortly before my father died in 2022. They are due a federal refund, and every time I've entered the information online, it states its pending. This has been pending now for over a year now, the IRS refund. What can I do to get this money refunded back to my mother? Our accountant has called, and for the last year, they keep saying another 30 days, clearly its been over a year now. Thank you.

[@mulloolyassetmanagement]

Not sure how to help with this specific case. Hang in there.

[@knightalumni]

I’m not retired yet, but did a rough calculation, and figured out if I have a dividend portfolio, the dividends I take out annually might cover the RMD 😁, meaning I never actually reduce the principle?

[@mulloolyassetmanagement]

On paper, that "seems good" for possibly the first year - or possibly the first few years. But at "some point in the future" that probably will not work.

[@rochelleholmes9271]

You explained what I was confused about. Thank you

[@mulloolyassetmanagement]

Glad it was helpful!

[@gimcoaching6442]

This was great! Thank you for this video. I'm helping my parents understand this now while they're in their 60s. QUESTION: I understand taking the balance and dividing it by the IRS-determined factor based on their age, BUT what if my folks have 3 different IRAs and a TSP? Could you just withdraw from one account at a time (depleting one at a time) or would they have to take an RMD from all of the existing accounts? Thanks for the great video!

[@mulloolyassetmanagement]

IRA's should be combined to determine the RMD. You can choose which account to take the funds from, or take a portion from each, up to the account holder. Workplace retirement plans - need to take an RMD each year.

[@enduringpromise]

If you have multiple accounts which would require RMD, such as multiple 401k accounts do you need to pull a portion from each account? For example let's say your total RMD withdrawal is 10 percent. I have two 401k accounts. Account 1 has 100,000 Account 2 has 1,000,000 Do I need to pull 10 percent from each of these accounts or can I simply pull ten percent of the total from one account? Which would be 110,000 from account number 2.

[@mulloolyassetmanagement]

401k accounts require an RMD be taken. From each 401k account. If you have two 401k accounts, two RMD's. If you have three 401k accounts, then 3 RMD's per year. However, if someone has multiple **IRA** accounts, you can pull the entire RMD from just one IRA account. Hope that helps.

[@user713Blvd]

Hello, Thanks for sharing this episode. For example, if my RMD is $6k but i withdrawn $10k. Can i put $4 that i didn't use to my ROTH IRA? Thanks

[@mulloolyassetmanagement]

Thanks for your question. We hate to say it, but "it depends." For example, if you are taking an RMD, you may be already retired and thus no longer working. You need earned income to make a *Roth contribution.* However, you can do a "Roth conversion" at any age. In any year with an RMD, the first dollars you withdraw from that account are treated as part of your RMD. Once you meet the minimum amount, you’re free to convert the rest of your account (in whole, or in part) into a Roth. As you know, that will be a taxable event. You cannot reinvest required minimum distributions in a Roth IRA. But you can convert any remaining amount from your pre-tax retirement account, the IRS specifically prohibits you from putting RMD funds in a tax-advantaged portfolio. Hope that helps.

[@tomfortuna767]

Why can't this person do a Roth conversion? Makes sense to me.

[@tomfortuna767]

I will answer my own question. Roth conversions are only allowed after RMDs are taken. Sorry about that t

[@damondiehl5637]

Is that the balance at the end of the day on Dec 31st?

[@mulloolyassetmanagement]

Yes. The balance on the 12/31 statement from the prior year.

[@mrhamburger6936]

My question is the bank that you have a ira with can they help you with this rmd on a timely Manor

[@mulloolyassetmanagement]

They ought to help customers!

[@harolddouglas4057]

Are the RMDs required for 2024 the same as for 2023, or have the tables changed?

[@mulloolyassetmanagement]

Great question! The IRS has changed again! Here is your answer: kzbin.info/www/bejne/oJi5l5mZqdalncU

[@doughoesen2103]

Read something on gov site about taking more than min , but it goes on to describe some confusing situations with the amount you have to use to figure the Ira amount . Can you comment, or am I just making this more complicated?

[@mulloolyassetmanagement]

Good question. Best thing to do would be to watch "part II" of this topic. We walk through an example of that right here: kzbin.info/www/bejne/jWbFfYKBgKeNjLc

[@garycumberland8089]

Is the balance of all accounts combined or each individually

[@mulloolyassetmanagement]

@garycumberland8089 - if you have a balance in a 401k, that needs to handled separately, and a distribution for (at least) that amount needs to come from the 401k. If all your retirement accounts are in IRA, then you can calculate the balance of all accounts combined. Hope that helps.

[@robkeshav800]

Is there any way to reduce taxes due to RMD withdrawal other than QCD?

[@mulloolyassetmanagement]

Thanks for watching! Required Minimum Distributions (RMD) are ordinary income.

[@jaysmith201]

Non-roth IRA... What if the IRA account is generating as much or more gain than the original balance was when the ira was inherited? in 10 years, the account may not be drawn down 100% in 10 years.

[@mulloolyassetmanagement]

To answer your question, gains will not matter. To be clear, we're not fans of this rule. But the way it is written now, a (new) beneficiary IRA needs to have a zero balance at the end of 10 years. Many years ago, after someone would pass away - we would simply contact beneficiaries and ask "how much do you want withheld in taxes, because you will be getting a check for the entire balance." There was no such thing as a beneficiary IRA.