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Re: RMDs [Re: BobBrown] #15695813 01/23/21
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Old_Toot Offline OP
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Originally Posted by BobBrown
I love when Covtards try to appear smart 不不


You never have to concern yourself with appearing smart, Flave.

Never, not even maybe.


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What we've learned from history is that we haven't learned from it.
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Re: RMDs [Re: Spanokopitas] #15695827 01/23/21
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Originally Posted by Spanokopitas

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.



You might want to read the Motley Fool and what Forbes has to say about it.

It could be bad to assume tax free growth at this point in time, tax protected or otherwise.

Jmo


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Re: RMDs [Re: Old_Toot] #15695949 01/23/21
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Originally Posted by Old_Toot
Originally Posted by BobBrown
I love when Covtards try to appear smart 不不


You never have to concern yourself with appearing smart, Flave.

Never, not even maybe.

Deacon Dave, dumas s


[bleep] Democrats . TRUMP 2020


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Re: RMDs [Re: Old_Toot] #15696117 01/23/21
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Originally Posted by Old_Toot
Originally Posted by EdM
Originally Posted by Spanokopitas

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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Re: RMDs [Re: BobBrown] #15696232 01/23/21
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Originally Posted by BobBrown
Originally Posted by Old_Toot
Originally Posted by BobBrown
I love when Covtards try to appear smart 不不


You never have to concern yourself with appearing smart, Flave.

Never, not even maybe.

Deacon Dave, dumas s


Wino Flave, you dumbassed fk.


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Re: RMDs [Re: Old_Toot] #15696578 01/23/21
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Further to the thought of taking money out to avoid higher taxes in the future:

Assume you take an RMD of 100k. Also assume you are in the 20% tax bracket. You now have 80k to invest. So you must gain 20k to breakeven, then you must gain even more to profit because you will be paying the higher tax rate you sought to avoid. Doesn't make a lick of sense to me.

If you had left the 100k in it would go on making gains at the same rate as the 80k you took out.


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It's better to live rich than die rich. Live simply so that I may simply live large.
Re: RMDs [Re: Spanokopitas] #15696597 01/23/21
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Originally Posted by Spanokopitas

Further to the thought of taking money out to avoid higher taxes in the future:

Assume you take an RMD of 100k. Also assume you are in the 20% tax bracket. You now have 80k to invest. So you must gain 20k to breakeven, then you must gain even more to profit because you will be paying the higher tax rate you sought to avoid. Doesn't make a lick of sense to me.

If you had left the 100k in it would go on making gains at the same rate as the 80k you took out.


Spano, youre assuming gains. Theres also negative tax free gains if your investments falls in value.

Look up what the penalties are for not taking a RMD.

Im not contesting your math at all. What you say is true,,,,IF.

But all that aside, we will be taking the 2020 RMDS this calendar year.


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Re: RMDs [Re: Old_Toot] #15697620 01/24/21
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Do what you must.

There is no penalty for not taking your 2020 RMD.

If you take the money out when you don't have to and reinvest it you are immediately in the hole for the amount of taxes you paid. If investments made with that RMD money fall in value you are further in the hole (by the amount of tax paid) than had you left the money in.

If you do not take money out and your investments go down, they are valued exactly the same as if you had taken the money out. BUT, and this is a big BUT you have not paid the tax so you are ahead by the amount of taxes you would have paid.

The reverse applies if your investments go up.

To me it makes sense to not take an RMD unless required or you need the money for other than investment purposes, say to buy a second or third home or more guns.


www.paracay.com



It's better to live rich than die rich. Live simply so that I may simply live large.
Re: RMDs [Re: Old_Toot] #15697805 01/24/21
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You old farts should be discussing trusts, not your puny RMD's.

The rehab facility will soon be taking it all as your oldest daughter has to write them a five figure check monthly.

Re: RMDs [Re: Old_Toot] #15698025 01/24/21
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Us Old Farts can easily afford monthly five figure checks and more. And, yes, we all have Trusts. Trusts are for people who have significant assets.

No need for you to worry your pretty little head about trusts. Just keep adding to your asset base; Aluminum...Beer cans that is.


www.paracay.com



It's better to live rich than die rich. Live simply so that I may simply live large.
IC-B

Re: RMDs [Re: Spanokopitas] #15698049 01/24/21
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Originally Posted by Spanokopitas

Do what you must.

There is no penalty for not taking your 2020 RMD.

If you take the money out when you don't have to and reinvest it you are immediately in the hole for the amount of taxes you paid. If investments made with that RMD money fall in value you are further in the hole (by the amount of tax paid) than had you left the money in.

If you do not take money out and your investments go down, they are valued exactly the same as if you had taken the money out. BUT, and this is a big BUT you have not paid the tax so you are ahead by the amount of taxes you would have paid.

The reverse applies if your investments go up.

To me it makes sense to not take an RMD unless required or you need the money for other than investment purposes, say to buy a second or third home or more guns.


I think that youll find that you are now required to take your 2020 based RMD (formula applied to total amount of IRA at the close of 12/31/2020). in this 2121 calendar year.

Failure to do that has rather severe financial penalties.


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Re: RMDs [Re: Old_Toot] #15698096 01/24/21
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RMDs are required for 2021.

Trying to time the market is foolish. It goes up and it goes down, up more often than down.


Don't blame me. I voted for Trump.
Re: RMDs [Re: Old_Toot] #15698108 01/24/21
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I have two Trusts, One OR and one CA. I am familiar with Trusts....trust me.


www.paracay.com



It's better to live rich than die rich. Live simply so that I may simply live large.
Re: RMDs [Re: Spanokopitas] #15698132 01/24/21
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Originally Posted by Spanokopitas

I have two Trusts, One OR and one CA. I am familiar with Trusts....trust me.


Yep.
Anyone with an appreciable amount of property, especially in more than one state, should consider using Trusts or make preparations for some possibly very costly estate probate issues.


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Re: RMDs [Re: Old_Toot] #15698161 01/24/21
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Originally Posted by Old_Toot
Originally Posted by Spanokopitas

Do what you must.

There is no penalty for not taking your 2020 RMD.

If you take the money out when you don't have to and reinvest it you are immediately in the hole for the amount of taxes you paid. If investments made with that RMD money fall in value you are further in the hole (by the amount of tax paid) than had you left the money in.

If you do not take money out and your investments go down, they are valued exactly the same as if you had taken the money out. BUT, and this is a big BUT you have not paid the tax so you are ahead by the amount of taxes you would have paid.

The reverse applies if your investments go up.

To me it makes sense to not take an RMD unless required or you need the money for other than investment purposes, say to buy a second or third home or more guns.


I think that youll find that you are now required to take your 2020 based RMD (formula applied to total amount of IRA at the close of 12/31/2020). in this 2121 calendar year.

Failure to do that has rather severe financial penalties.


That could well be true. All I was saying is that you are not required to take the 2019 RMD. This is from Vanguard and my CPA.

I pay my CPA very well to deliver me from severe financial penalties. And I trust Vanguard, been with them for decades.


www.paracay.com



It's better to live rich than die rich. Live simply so that I may simply live large.
Re: RMDs [Re: Old_Toot] #15698177 01/24/21
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Roths...no RMDs for Roth IRAs during the account owner's lifetime.
I think theyre a good investment tool for working class people.


Every day on this side of the ground is a win.
Re: RMDs [Re: Old_Toot] #15698210 01/24/21
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Originally Posted by Old_Toot
Originally Posted by Spanokopitas

I have two Trusts, One OR and one CA. I am familiar with Trusts....trust me.


Yep.
Anyone with an appreciable amount of property, especially in more than one state, should consider using Trusts or make preparations for some possibly very costly estate probate issues.


It would pay them dividends if some of the children around here would pay heed to us Old Farts.

Trusts do not limit or reduce taxes, they allow avoidance of probate which can be long, complicated and expensive, especially if big bucks are involved and beneficiaries get onery. Your heirs will still need to hire a trust attorney. Best if they use the attorney who crafted your trust.


www.paracay.com



It's better to live rich than die rich. Live simply so that I may simply live large.
Re: RMDs [Re: Spanokopitas] #15698219 01/24/21
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Originally Posted by Spanokopitas
Originally Posted by Old_Toot
Originally Posted by Spanokopitas

Do what you must.

There is no penalty for not taking your 2020 RMD.

If you take the money out when you don't have to and reinvest it you are immediately in the hole for the amount of taxes you paid. If investments made with that RMD money fall in value you are further in the hole (by the amount of tax paid) than had you left the money in.

If you do not take money out and your investments go down, they are valued exactly the same as if you had taken the money out. BUT, and this is a big BUT you have not paid the tax so you are ahead by the amount of taxes you would have paid.i


The reverse applies if your investments go up.

To me it makes sense to not take an RMD unless required or you need the money for other than investment purposes, say to buy a second or third home or more guns.


I think that youll find that you are now required to take your 2020 based RMD (formula applied to total amount of IRA at the close of 12/31/2020). in this 2121 calendar year.

Failure to do that has rather severe financial penalties.


That could well be true. All I was saying is that you are not required to take the 2019 RMD. This is from Vanguard and my CPA.

I pay my CPA very well to deliver me from severe financial penalties. And I trust Vanguard, been with them for decades.



Agreed about last year. There was never any argument about last year.

All references that I made concerned this calendar year.

Redux:
For those who feel that the market will fall in this 2021 calendar year AND with the market at a relative high point,,,some may want to consider taking their RMDS immediately while the market is high as opposed to waiting until later IF the market falls and causing a deeper hit to ones nest egg.

Thats all.


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What we've learned from history is that we haven't learned from it.
Re: RMDs [Re: IndyCA35] #15698230 01/24/21
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Originally Posted by IndyCA35
RMDs are required for 2021.

Trying to time the market is foolish. It goes up and it goes down, up more often than down.


Truer words were never spake.

That is why I like Total Market index funds.


www.paracay.com



It's better to live rich than die rich. Live simply so that I may simply live large.
Re: RMDs [Re: Spanokopitas] #15698239 01/24/21
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Originally Posted by Spanokopitas
Originally Posted by Old_Toot
Originally Posted by Spanokopitas

I have two Trusts, One OR and one CA. I am familiar with Trusts....trust me.


Yep.
Anyone with an appreciable amount of property, especially in more than one state, should consider using Trusts or make preparations for some possibly very costly estate probate issues.


It would pay them dividends if some of the children around here would pay heed to us Old Farts.

Trusts do not limit or reduce taxes, they allow avoidance of probate which can be long, complicated and expensive, especially if big bucks are involved and beneficiaries get onery. Your heirs will still need to hire a trust attorney. Best if they use the attorney who crafted your trust.




Yessir and Ive seen the scenario that youve described happen and it wasnt pretty plus the legal fees were exorbitant.

Call it a Lawyers wet dream come true,,,all of which could have been avoided with a little judicious planning and minor expense relative to what expenses that can occur down the road.


The degree of my privacy is no business of yours.

What we've learned from history is that we haven't learned from it.
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