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For those expecting a market correction, you may want to consider taking them earlier than later this year.
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What we've learned from history is that we haven't learned from it.
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Campfire Ranger
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In my case, RMD is based on last year's figures - not earnings this year. Anyone have a different take?
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In my case, RMD is based on last year's figures - not earnings this year. Anyone have a different take? I believe you are correct, RMDs are based on the number in the acct at the end of 2020.
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Campfire Ranger
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OP
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In my case, RMD is based on last year's figures - not earnings this year. Anyone have a different take? I believe you are correct, RMDs are based on the number in the acct at the end of 2020. This.
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Campfire Ranger
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there are several ways to calculate rmd but all are based on ending value of the year previously which would be 12/31/2020
THE BIRTH PLACE OF GERONIMO
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Campfire Ranger
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there are several ways to calculate rmd but all are based on ending value of the year previously which would be 12/31/2020 Pretty much (in the main) limited to the age factor used to calculate.
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From what I understand, you did not have to take any RMD for 2020. I don't need mine, so they are invested right back into my portfolio.
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Campfire Outfitter
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Because of the ChiCom flu RMD's were not required in 2019 and 2020. I didn't take mine. Saved quite a bit in taxes.
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Campfire Tracker
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For those expecting a market correction, you may want to consider taking them earlier than later this year. Agreed! Just took all of my RMD's for the year, while the Dow was still at 31K. It is a matter of time before Grandpa Biden finds some way to throw a wrench in things to the point that the market begins to react.
I'd rather be a free man in my grave, than living as a puppet or a slave....
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Campfire Outfitter
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Why take an RMD if you don't have to and pay tax on it?
If you want out of the Market you can easily move money out of stocks into cash or bonds WITHIN you tax free account. No Tax consequences.
www.paracay.comIt's better to live rich than die rich. Live simply so that I may simply live large.
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Campfire Ranger
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Seems like quite a bit of misunderstanding about a fairly simple thing..
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Campfire Ranger
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OP
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Why take an RMD if you don't have to and pay tax on it?
If you want out of the Market you can easily move money out of stocks into cash or bonds WITHIN you tax free account. No Tax consequences.
I believe that you do have to take it from 2020 in this year, 2021. If we can possibly not have to take it this year for 2020 then we should be able to return to our accounts as was done last year. If you know any specifics about NOT having to take the 2020 RMD in this calendar year please do inform us.
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Campfire Ranger
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According to Forbes and Motley Fool the RMDs are back in force for 2020 to be taken this year, 2021.
So, back to the OP about taking them early this year with the market presently being somewhat high.
Any other info or suggestions are most welcomed.
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I'm only an ignorant amateur with this stuff, and my simple understanding is that the overall amount of your RMD to be "taken" in 2021 is calculated on the basis of a snapshot of your account value on a certain date - I think ending of 2000. Unless the reg/method changes, the same would be true for the RMD in 2022 - based on value of account at end of 2021.
1. If someone is saying that the date on which one chooses to "take" the RMD during 2021 would affect its amount, I don't understand that idea.
2. If someone is talking about management of the account for balance and effect on earnings during 2021 as we normally try to do in dealing with interest fluctuations - the timing of one "taking" the 2020 based RMD could have effect on the 2021 final snapshot and, thus, the RMD outcome as"taken" in 2022.
Which would it be?
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Campfire Tracker
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I'm only an ignorant amateur with this stuff, and my simple understanding is that the overall amount of your RMD to be "taken" in 2021 is calculated on the basis of a snapshot of your account value on a certain date - I think ending of 2000. Unless the reg/method changes, the same would be true for the RMD in 2022 - based on value of account at end of 2021.
1. If someone is saying that the date on which one chooses to "take" the RMD during 2021 would affect its amount, I don't understand that idea.
2. If someone is talking about management of the account for balance and effect on earnings during 2021 as we normally try to do in dealing with interest fluctuations - the timing of one "taking" the 2020 based RMD could have effect on the 2021 final snapshot and, thus, the RMD outcome as"taken" in 2022.
Which would it be? As a person who has had to do RMD withdrawals from retirement accounts for the past 4 years, I know a bit about it- The amount of an RMD to be taken in any given year, if you are old enough to have to do it, is based upon two things: The value of the retirement account at 12/31 of the previous year, and a divisor, based upon published IRS timetables, that determines the amount of the RMD for the present tax year. As far as the date the RMD is taken, here is an example: Say your year-end value was $100,000, and the RMD tables says you must take out $5,000, as an example. That number is a fixed value. What is not fixed, however, is the value of that account in the present tax year. It may be higher than the $100K, or it may be lower, due to market fluctuations. Now, if you take out the $5K when the value of your account is, say, $110,000, you are left with $105,000 in that account, to continue to work for you. If, however, the market tanks, as it periodically does, and the value of your account at the time of your RMD is, say, $80,000, you are left with only $75,000 to continue to work for you. That is why it is advantageous to do your best to try to time your withdrawals.
I'd rather be a free man in my grave, than living as a puppet or a slave....
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Campfire Ranger
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Campfire Ranger
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Thanks for that view. I'm no experienced "expert", but that is the same scene I see. Two different issues - one is RMD amount, other is investment management. Difficult to understand why there would be such apparent divergence or confusion.
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Campfire 'Bwana
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Why take an RMD if you don't have to and pay tax on it?
If you want out of the Market you can easily move money out of stocks into cash or bonds WITHIN you tax free account. No Tax consequences.
Perhaps with a view that tax rates will rise in the future.
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Campfire Ranger
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Why take an RMD if you don't have to and pay tax on it?
If you want out of the Market you can easily move money out of stocks into cash or bonds WITHIN you tax free account. No Tax consequences.
Perhaps with a view that tax rates will rise in the future. Guaranteed, Ed.
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Campfire Outfitter
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My 401k s are with Vanguard, have been for years. They automatically transfer the proper amount out and into my taxable Prime Money Market fund.
Last year (2020) through a misunderstanding they took my RMD. My CPA told me to put the money back in the 401k and he would treat it as a "rollover" on my 2020 return. Fixed it, no tax liability.
I don't think it has been decided whether or not RMDs will be required for 2021. Stay tuned.
A valid point can be made about taking and paying now if you expect taxes to be radically higher in future years. But, if they are and you reinvest the money you will be paying the higher taxes on your gains rather than letting your money grow tax free in the 401k. To me it seems better to leave it in the 401k and let it grow tax free.
Another option would be to take it out, pay the tax, and put it in a Roth.
These are questions better answered by your CPA or EA who has knowledge of your personal circumstances.
www.paracay.comIt's better to live rich than die rich. Live simply so that I may simply live large.
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I love when Covtards try to appear smart 🤣🤣
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