Over 80% of Retirees Are Making this HUGE RMD Mistake | Is this You?

[@cgmoog]

Retired 18 months ago at age 63. The hardest thing is spending money. The saving habit had been ingrained for 35 years and switching over to spending is harder than I thought it would be.

[@johnzemetra6106]

I agree with you that the saving habit is hard to break. I am 70 years old and just started Social Security this year and my wife started 2 years ago. I also have a pension, between these three sources of income we have more than enough income. I also have retirement accounts and inheritance. It is still hard to tell myself that I have enough money, go spend it.

[@KathleenMcNe]

Same. I retired 3 years ago at age 63. I was so accustomed to living very frugally and saving/investing aggressively and consistently that switching from saving to spending did not come easy. My brokerage accounts have a combined $4.5 million balance, but I have a phobia about withdrawing from them, so I never do. It's as if there is a red, flashing "DO NOT SPEND" sign on the accounts. I use the income from my mortgage-free rental properties to pay my bills. My CPA finally told me that I should start spending money on myself.

[@baron7024]

I think this approach is the result of being children and grandchildren of Depression Era parents and grandparents. Frugality and putting away for a rainy day were a way of life passed down to those currently in their 60's and older. We'd rather have financial security than a lot of things that really don't enrich life.

[@johnzemetra6106]

@@baron7024 I agree with you 100%, my father was unemployed and under unemployed when I was in high school. My mother died when I was 11 so my brother and I had to grow up fast. My father taught us how to fix things, bikes, cars, plumbing, etc.. It could have been a lot worse, a friend in Boy Scouts father lost his job in the aerospace industry and his wife flipped out, resulting in murder/suicide, life in the early 70’s was brutal. I was always looking to make a buck, save a buck, or not spend a buck. I am so glad at this point in my life I don’t have to worry about money.

[@ralphmowery2898]

@@johnzemetra6106 Sort of the same for me. Retired at 62 and now at 74 and I have a hard time spending the money. SS plus pension plus IRA is lots more than I made working. Plus everything is paid for. Just not much that I do not have at this age that I want. A few years ago I traded in a 10 year old car with less than 25,000 miles on it for a new one just because it was 10 years old. Sometimes it is just hard for me to justify paying the price for some things. There is something I would like to have for about $ 5000 and can afford it but no more than I would use it, say about 10 times a year, it just does not seem worth getting it. Now if it was say $ 1000 or less I would get it. Just as I bought a new tiller for my very small garden because I wanted a rear tine instead of the front tine that I already have. I only use that thing about 5 times a year.

[@lmr691]

I like your financial tips. I have been retired 27. years but still budget and spend below our income. It’s personal satisfaction and security.

[@RetiredPilot]

I am 82 and had a stroke 18 months ago. My greatest pleasure is managing our acounts and counting our good fortune. We enjoyed our early retirement with boats, and a home in Florida. Now we enjoy getting up in the am and realizing we are still happy. (married 62 years). Like your grandma we are slowing down and accept that. Our enjoyment now is more in giving than taking, putting money away for our grandchildren's education and helping our kids. Having extra money is a blessing not a curse and yes the government will reap some of the rewards, but we will never worry about how we spend our final days. Having too much money in old age is what life is about. JMHO

[@paulbrungardt9823]

Blessings to you. BTW, my son flies 737 for American Airlines. I am 70 year of age and married 44 years. I practiced optometry for 30 years. We fund our charity which provides optometry services and free eyeglasses to children in Central America. Do Well, then -- Do Good !

[@Batirtze-b6x]

There you go!!!!! Keep at it. ❤

[@willjay916]

@@RetiredPilot Where you going with it?

[@MargaretWest-m8u]

Retirees who struggle to make ends meet are often those who didn't accumulate enough wealth during their working years. The choices you make regarding your retirement investments can have a significant impact. My parents both spent the same number of years in the civil service, but my mom invested through a wealth manager while my dad stuck with his 401(k).

[@Toni__Michelle]

This resonates with me. I’m in my mid-50s now, and my wife and I were following a similar path. Two years ago, I shifted my funds to her wealth manager’s guidance. While I’m not matching her returns yet, I’m definitely seeing higher gains than I would have with just the 401(k). My retirement fund is growing faster than ever-even before I officially retire!

[@FrankJaaay]

It’s unfortunate that many people lack access to this kind of information. It’s understandable why some panic when they don’t have the right guidance. Personally, I've earned over $287k passively by investing through an advisor, without the need for much involvement. Whether the economy is booming or volatile, a skilled wealth manager consistently delivers results.

[@HotManP-l5g]

How can I find a trusted financial planner like yours?

[@FrankJaaay]

I consistently recommend Rebecca Lynne Buie as my top choice. She is well-known for her expertise in financial markets and has an impressive track record. I highly endorse her services.

[@JohnJohn-wr1jo]

Listeners, please do your homework before even meeting with any financial professional let alone sharing any personal info. There are many predatory individuals who troll this and similar sites. Don't become a victim

[@pauldelray5839]

Every RMD is listed on your Tax form 1040 under Line 2A. This new income will be added to your adjusted income Line 11. Medicare will use both figures to determine possible increases to your Medicare IRMA’s. They go back two years. A large withdrawal can leave you with an unexpected large new monthly IRMA. Also applies to your prescription fee part of Medicare. So please, plan accordingly.

[@kenneths.perlman1112]

That damn IRMA.

[@pauldelray5839]

@@kenneths.perlman1112 You can off-set some pain by making a charitable contribution BEFORE you make your RMD. In an IRA this called Qualified Charitable Distributions (QCDs). Your financial instittution makes the contribution for your selected charity. You should not see check or handle it yourself. You use 1040 tax form for a QCD. This reduces the income part for 2A line and avoiding a higher IRMA calculation. Charity contribution do not count as income. You need to look ahead and plan with your financial instittution.

[@ontheroadwithRalph]

But you can do a QCD and that may help to keep you from jumping into the next IRMA bracket. Tax planning is the key.

[@vinyl1Earthlink]

This entirely depends on your personal financial situation. Some people are short of money, and will have to take money from retirement accounts just to survive. Others have plenty of money, and don't need anything from their retirement accounts. You have to look at you total situation, including the tax consequences, and decide what to do.

[@fdm2155]

Yes, I think he acknowledge that by pointing that some will want to leave funds and others will want/need to spend most if not all of the funds. These decisions always have to be tailored to the individual. I think this video is a good reminder that the RMD is a floor, not a ceiling.

[@janeolinger8038]

My mother lived to be 98, the last 10 years of her life in an assisted living facility. There was no tax deduction and insurance doesn’t cover assisted living. By the end of her life, she was paying $8,000/ month. Even with a substantial monthly income, Mom went through half of her assets. Many, if not most, of the other residents outlived their assets. This was a major shock for them, because most had what seemed like wealth. As people seem to be living longer and longer, this is going to happen more and more.

[@user-roadwander]

I plan to use my pre-tax IRA to pay for my assisted living. My doctor needs to document that I can’t live on my own, is my understanding. This was how my father lived out his last 3 years.

[@janeolinger8038]

@@marktapley7571 I was referring to the people who live to a very advanced age. There are many living well into their nineties and even into their hundreds. I have known a good many personally. These are mostly the people outliving their assets.

[@jodylarson4697]

Your mom's assets were intended to pay for her living expenses. That she went through only half shows that she had more than enough. That's a good thing. We can't prepare for everything that will happen. Many people may outlive their assets, but fortunately we have Medicaid. Time was that we did not have social programs and elderly people lived in poverty with their children and grandchildren, IF they had them.

[@mopsman]

This is spot on. I retired as a multimillionaire and was living with a goal of not using my 401ks until RMD. Even to the (foolish) point of timing cashing out funds and stocks to timing dividends. My new epiphany is to have plenty of cash quickly available for whatever I want, and not have to think about the timing details. One more point you might want to add to your "legacy" discussion: if you leave a lot money in 401ks, your heirs will have to pay the taxes. I had to deal with that with 2 relatives who left 401ks, it's a pain.

[@PeterHernandez-lg2eh]

This is where I'm at . Frugal to the end no bueno

[@sharontabor7718]

And then there is the fear of not having enough money to pay for assisted living or home health care. I don't want to be 90 and trying to figure out how to pay for my care-I have no children. I would rather be frugally comfortable and leave money to charities than be put out on the streets with nowhere to go in my old age.

[@alanhill2508]

I agree with you 100%. One thing Jeff never addresses in this video is lifestyle. IMHO, too many people want too much. Like you, I truly enjoy a frugal life. I don't want a new car (mine is 16 years old and runs like a top); I have no desire to travel to Europe; I enjoy my state and local communities, all drive-able. Also like you, I have no children, but that doesn't mean I don't care about the future. My trust is set up to distribute my assets to a scholarship organization and a well known children's research hospital. I would much rather enjoy a simple, frugal life and have fewer worries about ending up destitute.

[@glasshalffull2930]

BINGO!!! When my mother was in her 90s, her care was costing about $112K a year.

[@ediefrasier2932]

Thank you for sharing the story of your grandmother. Happy Thanksgiving to you and your family.

[@edb3877]

Agreed. It really added a nice human touch to a subject that is very often excessively dry. My grand parents were born in the 1890s and were members of "the working poor". They worked hard almost all their lives and never had much. But when we would visit, Gram always made a great dinner for us and cooked it as only she could. She didn't have a lot in the way of worldly possessions but she had great love for her children and grand children. She has been gone for many years now and is still greatly missed.

[@mitchburk5112]

On my financial advisor's advice I started yearly withdrawals from my trad IRA when I retired at age 59. We shoot to stay mostly in the lower two tax brackets with a bit in the third 22% bracket. If you wait to take your RMD at 73 there is a good chance you will have a significant portion in the upper brackets so withdrawing earlier and carefully watching the tax brackets will save you on taxes in the long run.

[@jimlow6824]

Good advice from your financial planner. If you didn't need the money, you could also have done ROTH conversions. Hopefully, this will keep you clear of Medicare IRMAA payments when you start taking RMDs.

[@SpookyEng1]

I’m 60 and am retiring next year. My plan is to do ROTH conversions to the 22% bracket until I take SS at 67 FRA.

[@RetrieverTrainingAlone]

EXCELLENT! We are 5 years off RMD age at 73. We are using a recent inheritance to pay taxes on Roth Conversions to minimize our tax liability associated with large RMDs.

[@ramyhuber8392]

This is helpful for me to clarify within myself what "quality of life" means. Thank you for posting the video! Am 72, semi-retired, female, single, no children. . I enjoy my friends, my animals, beauty of nature, good food. It is true that I worked and saved for many years, and also inherited some money unexpectedly. Right now, it will be plenty to last me the rest of my life, barring a huge crash of US economy, which did happen in the 20s. I am taking minimum RMDs at present.

[@Batirtze-b6x]

From a very happy single woman with no kids at working age to another, GOOD FOR YOU. ❣️❣️❣️❣️

[@chinesecrested9528]

Thank you for those wonderful story and the financial modeling. I am 70 living in Thailand. My kids and grandkids are grown. I noticed the slowing upon my arrival a year ago.

[@richardc488]

Mr S, taking my money out early and having fun with all my traveling. Going on world cruise for two and my account didnt even move with the fund increase!

[@fdm2155]

That sounds amazing!

[@j.m.7056]

Enjoy yourself!

[@allen_p]

Wonderful story about your gramdmother

[@commonsense6967]

I love the story about your grandma, too! I may do the same, as my kids and grandkids are located cross-country from me.

[@commonsense6967]

My gift to myself in retirement is NOT to be forced into some state-paid for poorly run nursing home at life's end, but to have enough to live well, with adequate assistance with ADLs and cooking/cleaning chores out of the way and no home maintenance worries. THAT may well require $100K per year in 10 or 15 years, when I'll likely need it. (I'm 73.) Why impoverish myself now, taking away my choices later? If for some reason I never need the funds for that, then I'm happy to leave my kids andgrandkids an inheritance. They'll surely need it.

[@sactopyrshep]

I'm doing the exact same thing. Between my SS and my pension, I am able to fully fund a comfortable lifestyle. Yes. My biggest concern is that I might end up in an old-person warehouse where they tear up worn towels for washcloths. I am 75, in good health, and take no medications. I may live another 15 years or more before I need care assistance. Until then, I will continue to only take RMDs from my retirement account to ensure a comfortable and dignified old age.

[@rocketscientist007]

Your numbers are way off. It was $100k per year 15 years ago. 15 years from now, it will be at least $200k per year. Nursing home costs are 100% deductible from federal income tax.

[@Bandaid17]

Well said. I dont see anyone talking about long term or short term care insurance here.

[@sactopyrshep]

@ the best health insurance is good health

[@scottsinnott2636]

I am 61 and I already started drawing from my IRA. I can reduce those withdrawals once social security kicks in.

[@mikeprice6504]

Agree completely in concept. That said, some of us are saving those dollars for long term care in later years. Avoiding the “scam” of LTC insurance. At the same time, we are taking our kids on trips. Hopefully balancing the long term need with short term pleasure.

[@prieten49]

Have you checked out some of those monthly fees for assisted living or nursing homes? They are expensive! If you spend all of your 401(k) or traditional IRA when you have a lot of "energy," you might not have enough later to get into a nice retirement facility.

[@christopherprice3226]

Thanks for this lovely memory and lesson.

[@SkepticalMechanic-l9x]

I need a way to draw up a plan to set up for retirement while still earning passive income to meet my day to day need and also get charged lesser taxes even while in a higher tax bracket. i want to invest around $250K savings.

[@viewfromthehighchairr]

Don't put all your eggs in one basket; instead, diversify into different asset classes to mitigate risk. If you lack extensive knowledge, consult a financial advisor.

[@Too-old-Forthischet]

Yes. It is very easy to buy in on trending stocks but the problem is knowing when to sell or hold, which is why having guidance is important. I've been in touch with one for about a year now and although I was initially skeptical about it, I will say I've made more progress within a year generating 6figure profit

[@AlbertGReene-p8w]

This is incredible. Could you recommend who you work with? I really could use some help at this moment.

[@Too-old-Forthischet]

Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’Sophia Irene Powell ’’ for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.

[@EJJ-EvArms]

Thanks for sharing your memories of your endearing grandmother. How fortunate you are to have had her in your life. God bless you and your family. Your videos are appreciated.

[@davidlawson4281]

I was born in Kansas, grew up in KC, and I find this channel very sensible. I am 70, and agree with taking out more than the minimum, enjoying it, with still, a sizable bequeathment to grands.

[@peziki]

Seems like I'm missing the pt of this discussion. Holding back spending to prep for the future need of declining health. Is that not wise?

[@edb3877]

IMO, it is. Consider the reverse of that and its effect upon your life. Getting old has plenty of problems of its own without adding poverty to the mix. I usually take my RMDs rounded up to the next thousand dollars. I have more cash invested today than when I retired 20 years ago at age 55. It doesn't buy as much as it used to but it's still more than enough. Spending money doesn't excite me. Saving and investing for my family does. I live a simple but satisfying life, which pleases me and those around me. Leaving a substantial legacy is a good thing, if one can, as it is the final gift we can leave our heirs and / or favorite charity. Perhaps some people should consider investing a part of their savings in some solid blue-chip dividend-paying stocks? That way, their heirs will get a step up in basis such that if they sell quickly they won't owe any tax on them.

[@danyarbrough828]

He’s saying that, if you spend only your RMD each year, it should last until you’re 120. If you think you’ll die before 120, you could withdraw more than your RMD with relative safety. My goal is not to leave a ton to heirs, but to have enough so that they don’t have to change my diaper in my old age. I’ll pay a health care assistant to do that if necessary with my own funds, not theirs.

[@snoringdog1676]

So glad you visited this critical topic which luckily my financial advisor has been touching on quarterly/ annually during our planning calls.

[@SurfCityBill]

I former work colleague that I still stay in touch with turned 85. He says he has more in his portfolio than when he retired 20 years ago. Very likely he falls into a minimal spending category.

[@gr8dvd]

That’s half the challenge. The other half is how much to reserve for a "rainy day" most notably health or long term care. THAT is largely what keeps me from spending.

[@HiwasseeRiver]

There's also a net tax calc involved. Waiting means larger taxable amounts. Taking some distributions pre-RMD date lowers the RMD amount and brings some taxes forward into your pre-RMD years. Everyone has a unique tax position but early distributions may lower net taxes in addition to leveling out as Geoff mentions.

[@stevertx48]

Based on personal situation, I need to preserve as much as possible for impending in-home care needs. I have no long-term care insurance and do not believe I'm in the minority.

[@quaternion-pi]

If you or your family are not able to care for you, it currently costs ~ $10K/month in a nursing home. Medicare does not provide long term nursing home care. If you are indigent you might be able to find a nursing home that accepts Medicaid, but it won't be pretty. Dementia care is even more costly and becoming more prevalent.

[@timdowney6721]

Having done nursing visits in many long-term care facilities, I will enact my expiration date before “living” that way…..even in decent ones.

[@fdm2155]

Yep. Family member recently opted to move into a facility that offers nursing care to help with a chronic condition. They chose this over hiring help at home. It's a beautiful modern facility. They have a very nice one bedroom apartment with some good amenities ie entertainment options, onsite cafe and restaurant, option to have meals delivered, great public spaces. They choose the mid level option and yeah, it's gonna cost $100K/year. Obviously it will only go up from there. They are nearly 90 and have very robust retirement savings so it's okay for them financially. But wow. Not many could afford this place.

[@James4cycling]

@@timdowney6721How? Suicide? No one wants to go there.

[@quaternion-pi]

@@James4cycling The unexamined life is not worth living - Socrates. My personal perspective is that a life devoid of self-awareness, introspection, and critical thinking has no value to me. Both my parents required nursing facilities after the family could no longer take care of them at home, even with hired assistance. Luckily, funds were still available for these "no-go" years of retirement. At a minimum these issues should be addressed by the family.

[@MichaelPrudhomme-u7x]

Hospice is much less expensive ❤

[@willjay916]

I disagree with your analysis, perhaps because my means and scale of living are more modest (no complaints, it's just the way life played out for me). I anticipate that as I age that I will need to hire more help or assistance - I've already started down that road with the yard guy. I expect that in a few years I'll need a housekeeper, and periodic trades people for handyperson services, gutter cleaning, and household maintenance. It is my hope that the RMDs will cover these foreseeable future expenditures. If I croak before then, there will be funds to settle the estate. The unknown is my lifespan. The men in my family tend to die young (when my father was my age he'd been dead for three years), although there were a few who lived into their 80's and a grandmother born in the late 19th century who lived into her 80's. My intention is to be healthy and comfortable as best as I am able to be.

[@johnzemetra6106]

I agree with you on the unknown of lifespan. My mother died just short of her 49th birthday when I was 11 years old. My father lived until 96 with only the last 4 months in assisted living. I am 70 years old, active and relatively good health,but you never know what will happen.

[@ralphmowery2898]

I retired and find that some things that I would have done to save money I now hire out. Such as the water heater needed replacing which I could do and have done in another house I lived in. I hired it out as the labor was less than $ 200. Wife wanted a new sink so that was hired out. I really hate pluming even though I can do it.

[@willjay916]

@@ralphmowery2898While I am grateful for my reasonably good health, I find that I am not as flexible as I was years ago, so squatting or bending into positions for the extended periods of time necessary to do the work is making it more difficult and that's before considering whether or not I have the right glasses on owith me at that moment to do any detail work.

[@Riggsnic_co]

Retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My Husband and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement.

[@kevinmarten]

This is true. I'm in my mid 50's now. My wife and I were following this same trajectory. Last two years, I pulled out my money and invested with her wealth manager. Not catching up with her profits over the years, but at least I earn more. I'm making money even before retiring, and my retirement fund has grown way more than it would have with just the 401(k). Haha...

[@JacquelinePerrira]

Interesting . I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation..

[@kevinmarten]

There are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with ‘’ Carol Vivian Constable” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look-her up.

[@JacquelinePerrira]

She appears to be well-educated and well-read. I ran a Google search on her name and came across her website; thank you for sharing.

[@kennethspeaks2408]

First time to your site. Excellent content

[@Columbus1152]

I officially retired in 2018 at age 66, both my mother and my wife's mother had medical issues and we were both involved in their care. My wife was her mother's caregiver who suffered from severe dementia, my mother lived with a family member and we shared responsibility when needed. My mother passed in 2022 and my MIL 2023, so the first 5 years of our retirement have been spent on our responsibilities to our families. We haven't needed to pull much from our IRA's,

[@williammccaslin8527]

I will take the minimum distribution at 72, but we will reinvest it. As other commentors have said, I just can't bring myself to spend anything, but I've always lived like that. Now in the process of downsizing alot of stuff I have aquired over my working years that I no longer need, an its just taking up space. Thx for the vid Geoff

[@pubmeatman]

I’m about 5 years into retirement and I’m still concerned about sequence of returns risk. I live well with a 3% withdrawal rate before SS. My guess is I will leave a lot to my heirs. They have no idea how much I was able to save. Going to buy my first luxury car next year. Hard to turn from saver to spender.

[@carolemurdoch8671]

@pubmeatman I just purchased a new car, cash, as a pre retirement gift to myself. It's a car that I've always wanted. I love it! So I urge you to give yourself the joy of buying your luxury car! If you can afford it, and it sounds like you think that you can, then enjoy! 😊

[@squidward66]

I don't care if I leave money behind. Whatever. The kids can have it, goodness knows they'll need it.

[@splitliving]

Die Broke😅

[@kw7292]

@@splitlivingdon’t want to be the richest in the graveyard

[@markbajek2541]

Don't you want a high school named after you?

[@The-Armed-Pacifist]

Thank you. I always learn something here.

[@vernholdforth8423]

My wife and I (both in our 70’s) have been of the philosophy to ‘do what we can, while we can’, because we can’t take it with us.

[@user-yj3ob9kd3l]

Good advice, thanks. It's hard to switch the thought process from saving to spending. I haven't needed any funds from retirement accounts, and that has kept me in the saving mode. I have been a bit more loose with spending, though, like doing home improvements. None of it from retirement accounts. I'm also thinking about self-insuring for LTC. It's all good to think about.

[@Bandaid17]

Yes good point. We couldn’t qualify for LTC 8 years ago (65) but did take out short term care insurance. A good thing to spend your RMD on if you don’t really need it right now. In some instances, it can count towards your medical expenses on your 1040. I would defiantly look into it.

[@kenneths.perlman1112]

Taking it out early or higher than 4% of original total runs risk of running out. Unless you know or suspect earlier death so you want to make sure you don’t leave anything on the table, I think it’s better to use it as insurance against outliving your funds.

[@17713bb]

I retired this year, RMD is scheduled to begin in another year. I just initiated withdrawals to max out the 24% tax bracket every year. My new objective is to minimize size of the IRA. Removal from IRA with the least amount of overall tax is the primary concern. If/when faced with RMD at single tax payer rate, the tax will be excessive. Taxes seem to far exceed IRMMA cost concerns.

[@Silverbuzz]

We also followed your advice once we retired and could get our money out of our IRA. Our pensions and social security more than cover our bills and most of our needs. I recently purchased mini splits (to cool our home) and bought a new camping trailer ( which we use a lot) . I decided to take money from our IRA to pay these off (after paying on these for a few) . We are now debt free and have planned many trips this summer with our camping trailer..Thanks for the advice!

[@dianediliberto1876]

Excellent video. Thank you.

[@HolySchmidt]

Glad it was helpful!

[@peterbedford2610]

At 66, I am getting pretty tired of travel. Especially since I traveled the world in my career. Cutting back on travel really saves a lot of money.

[@davidlawson4281]

Interesting. I was born in Kansas, raised in KCMO. Moved around in military, landed in SE Ga. But, the investment, retirement funds were and are managed by Great Plains trust in Overland Park, Ks. I would like to hear more about grandma, who also lived and died in Rayrown, Mo.

[@aldntn]

Just because you take money from your retirement funds doesn't mean you have to spend it. I look at it as a way to ease out of the stock market.

[@wdtaut5650]

Before I retired, my wife and I looked at our spending very carefully. We determined what we would need to maintain our pre-retirement lifestyle with consideration for emergencies, car replacements, etc. Social Security, RMD, other savings, exceed our expenses. What is the point of us taking more than the RMD?

[@kevinreed7181]

This 7 minute video has really changed the way i now view ny retirement. Good common sense about active years that are left of your life. what good is all that money at 90 years old?

[@T_1357_F]

My decline in physical ability became noticable in my 50s. It has become even more readily apparent in my 60s. I fear how much steeper that decline will be in my 70s and onwards. Maybe if I keep my 401K sufficiently funded, I will be able to afford to replace my worn out body parts with artificial replacements as I transition into a cyborg in the later 21st Century.

[@donnareedfan]

Mr. Schmidt, the popping noise heard every time you put your hands together or bump the table: There are mic holders that suspend the mic with bands so that the mic is isolated from the stand vibrations. You could also use a better pop filter on the mic itself. Thanks for the RMD information!

[@Dbb277-2]

One important thing not mentioned is if you are afraid of running out of funds for a nursing home is to go into a facility that takes Medicaid. Once your own funds run out Medicaid will cover the costs. If you are concerned about not being able to afford care going to a facility that takes Medicaid is very important. Don’t think that all those that do are not good facilities because there are many that are good. Found one for my mother and was very happy with it.

[@donaldmiller9648]

Convert traditional IRAs to Roth IRAs gradually watching taxes and IRMMA trigger levels until you reach RMD age. Will be in better shape if you have larger traditional IRA accounts, if lower amounts wait until RMD age.

[@1notgilty]

As the old saying goes: "I've never seen a hearse towing a U-Haul." Enjoy your life and savings while you can.

[@markgoodsmith7229]

Excellent point! Thank you.

[@Bandaid17]

Great advice Jeff. Could you tie this into putting $ into LTC as it seems that people are concerned about nursing home costs? Also could you talk about Short term care insurance. Could the premiums be used as part of the medical deductions on the (itemized) 1040?

[@HolySchmidt]

Thanks for the suggestion!

[@josephcarames3249]

really useful information!

[@J123G]

Leaving extra funds in your accounts is absolutely necessary for most US citizens. Take a look at health related expenses as they relate to aging. Everyone in the US can relate to this and no doubt have had close relatives who all of a sudden needed to pay large medical bills they never could have expected. Yes .. spending funds when younger all sounds fine but there will be a time for most people that "surprise" expenses pop up and that unused cash is needed most.

[@jeanjasinczuk7543]

That video in my opinion muddle more than clarify anything. It seems to link RMD with spending, but that would not be correct. RMD means one has to withdraw a percentage based on age to pay taxes. But one can withdraw the money and transfer it after paying taxes to a taxable brokerage account.

[@user-yj3ob9kd3l]

Spending the funds from an RMD is an option that is doable, but not implemented by many. It's not necessarily to pay taxes, but to satisfy a requirement and enjoy the additional cash. It's better for those who can, to make the RMD and enjoy it. It's a quality of life improvement.

[@anthonyshoaf7824]

Great perspective! Thanks. I was afraid my health wouldn't last as long as my 401,SS etc. so I did the SS at 50% age wise deferring my 4% drawdown. right or wrong. I'm taking this video with a cautious thinking.

[@roberteverett9579]

I'm still working (part-time) paying off my son's student loans which I cosigned for. Will be done next year at age 70 1/2. When I quit my job, I'll consider taking some of the deferred cash prior to turning 73. I'll leave the kids something, but not enough to fight over.

[@larrywilliams5490]

Great information!

[@MS-ih8tg]

Beautiful story

[@jetscream53]

Misleading, thought you meant getting penalized from the govt. So how is this a mistake, especially if you are living comfortably before taking out RMD?

[@GB57825]

I would love for you to comment about how a Roth 401k allows part of your portfolio to avoid an RMD helping to control sequence of return risk exposure.

[@joemunch58]

This assumes that all withdrawals will be spent. I prefer to schedule withdrawals so that my overall income tax doesn't increase to a higher rate.

[@barbaralennon321]

Both my mom and my husdands mom spent all their money on a nursing home the last years of their life.

[@mkmariak]

Is there a rule of thumb for starting with larger withdrawals and then tapering off to rmd amounts later in life?

[@James4cycling]

Never use a rule of thumb. You need to do what works for you.

[@mikespangler98]

Not really. Don't break into the 24% rate if you can help it, and don't hit the IRMAA limit. If you are single IRMAA is the limiting number. $103,000 for 2024, $106,000 for 2025. Stay under that.

[@user-yj3ob9kd3l]

​@mikespangler98 thanks!

[@christinep.]

I restrict my spending not because I am saving money for my adult children or grandchildren (I have none) but because I want to be able to afford my care when it comes time. I don't want to be in a "facility" of any type. I've worked in them, consulted in them, and had family members in them. Just no! It costs a lot for any in home care and of course there is also inflation to consider.

[@tom-kz9pb]

Watch out that if you defer your 1st RMD as long as possible, you can get hit with the need to take your first two RMDs in the same tax year, which might have negative tax consequences. Be careful then when you start needing RMDs, you cannot have for example all your IRA funds tied up in long-term investments that have penalties for early withdrawal. You need to keep enough funds available and liquid for the RMD amount. IRS cares about the TOTAL amount of RMD taken across your IRAs and 401Ks, not needing the funds necesarily to be deducted per individual account. So you have some ability to juggle, if trying to preserve some long-term investments.

[@ralphmowery2898]

I try to keep enough in short term investments to get the rmd paid. Such as 3 months to 1 year Tbills or something that pays interest even if it is not much. Sometimes in stocks that seem safe enough and may even pay some money..

[@1man2many]

I have mixed assessment of this idea to spend now, because tomorrow you won't enjoy it. For widows, no kids, we may own a house that needs more and more expensive maintenance and property taxes, and we CAN outlive our money. THEN what do you suggest an old lady in her 90's do? Sell the house and get bumped from rental to rental? No thanks. Our society is not addressing this issue at all right now; maybe the baby boomers will drive change when they find themselves out on the street.

[@davidanson6115]

I enjoy your channel. In 1963 my father was stationed in Pearl Harbor and I was 4 years old. Any chance you were in Hawaii in 1963-1965?

[@jeffb.2469]

Wait, I thought RMD age was 75 for those born 1960 and later?

[@mspock7]

RMD vs IRMMA, a mini-max story.

[@williamdavis4511]

Cashing out no matter what and let the chips fall....

[@skippylippy547]

William, What do you mean by "cashing out"? At what point do you think you'll cash out?

[@jeromedion5723]

Okay . . . without consideration of preserving assets for the potential of long-term care for each of the spouses. Even taking more than the RMD can result in the creation of taxable accounts that sweep up any "excess" RMDs. Of course, those with more modest beginning balances may be in the position described in this video, but not everyone will escape long-term care in the later years.

[@JBoy340a]

I am taking my accounts with RMDs first and letting my equities grow.

[@esthernoel3793]

Thank you 💚

[@HolySchmidt]

You’re welcome

[@roarkdoubt1365]

Clear as mud.

[@chinabob17]

Please clarify what no tax on social security actually means it's a very ambiguous statement. If I have a job and make over the The limit do I get taxed on the job and no tax on the social security? It's very confusing I really appreciate your input and I'm sure to help others seniors as well thanks a lot.

[@KTPurdy]

I will continue to follow my fear.

[@joycewright5386]

I’m old enough this year to start QCDs on my IRA so I will be giving a lot to my church and favorite charities.

[@katmeup7]

My 403b is worth more than when I retired despite 3 years of RMDs. I don’t take any more than that because my taxes are already too high.

[@j.m.7056]

Me too. After being told taxes would decrease in retirement -- NOT!

[@James4cycling]

It will only get worse. I watched my mother get pushed into higher tax brackets.

[@j.m.7056]

​@James4cycling Yikes!

[@splitliving]

I agree. Not to mention the Medicare supercharges.

[@ralphmowery2898]

Same with my IRA. Worth much more now than when the RMD was required.

[@davidlawson4281]

Having an attorney familiar with these ins and outs is worth the money. I am not advertising, as I am actually a retired doctor. I also have an accountant of 34 years who will coordinated, at my will.

[@AnOldGuy164]

life is not always unicorns and rainbows. So one arrives at their 90s and has a situation where they need money. Having spent their IRAs or other savings because some financial advisor forgets the expected becomes a problem. But not the financial advisor's problem. My wife and I could live comfortably on our Social Security plus RMDs. Paying for all we want.

He waited till the age limit 71, took the RMD We live the lifestyle we want, incl soem travel. It will last until he is 92 or ten more years, unless he takes out more. My retirement is in Muni's, I bonds and our joint CD's and building up w/ interest, also his military pension and 401 civil service. With some inheritance from his parents, we stick w/ the RMD so far.

[@good.living]

From the comments, many seemed to have excuses justifying their saving habits after retirement even having a sizable traditional taxable retirement account. I think the key here really is to improve your quality of life while your body is able. What is your quality of life if you are no longer able to travel or already living in a nursing home needing 24-hour home care assistance? Do you want to use your retirement money for paying taxes and for just living longer (but without any quality) in the future or do you rather spend on yourself when you can enjoy life??

[@thomasrourke1690]

Thank You

[@lylestavast7652]

before it's all over ???? what???? what are you referring to ????

[@liveinthepresent219]

Croaking

[@peziki]

Probably the date of our demise, right? "All over" usually means the end of something... i.e. your life.

[@robertclark1263]

WHAT DEFINES a poor quality of life is and where the line is crossed that enters a good quality of life. THANKS

[@Armychuck]

Sorry Geoff, but you kind of lost me on the chart. Is "RMD-years" the same as what the government calls a life expectancy factor? Is each RMD-year number the same for everyone if we begin at age 73? How does the government get those strange numbers? Couldn't they just count down the years we have left by a whole number (minus one each year)?

[@kw7292]

Our home’s value is the first line of defense for assisted living/nursing. One parent spent 7 months in hospice, the other did 14 months of assisted living and 3 months of nursing. Plan on leaving nothing, if there’s anything left our heirs are welcome to it.

[@user-yj3ob9kd3l]

Good thought about home equity. It's always going to be there and can be earmarked for LTC.

[@rooster3019]

So, what should a "mother" do? I do not have a lot, but I have enough without taking pre-RMD withdraws. I could take a hit by taking it all out and averaging taxes or I could decide to not worry and be happy. Hmmm. Choice two seems nice.

[@jerryholder6999]

Maybe a couple of examples would be useful here. Seems there's risks everywhere you look: a risk of successful investments and a risk of not withdrawing enough at an age where it could be useful. Assuming of course, there's not an unplanned, end of life major expense. Just another risk...

[@stever1791]

If your Not spending enough money - Do some ROTH conversions to bring your Taxable income down when those RMD's are required , BUT STAY in the lower Tax Bracket if you can

[@Hank520Tube]

The whole issue is one about Too much government. Bureaucrats whose "job" it is to rake in the $, and the working person who is just trying to have a decent, good life. The problem is the bureaucrats and they need to be diminished or we'll all be in poverty and despair.

[@jimpatro4213]

Roth conversions are also an option.

[@williamelkington5430]

Good point. However, we do have the fact of significant inflation over the past few years, and we have no assurance that the FED will put the cat back in the bag for good. I wonder whether it isn't better in a time of potentially higher inflation--due to the president elect's articulated plans and policies--to be particularly careful with spending out of one's tax advantaged savings/investment plans.

[@robertharker]

Is the money counting machine in the B roll at 0:28 AI generated footage?