When and how much do we have to withdraw from our retirement accounts?

[pedro47]

To the OP, you have Fidelity, please ask Fidelity this question?
They will explain the differences between a regular IRA Account and a ROTH Account and Fidelity will set up your withdrawals plans from your regular IRA Accounts.

 

[pedro47]

We have Fidelity for one of our accounts. I will check that out.

Please let Fidelity set up your withdrawals plans for your regular IRA Accounts.
Bank account
Federal tax withholding

 

[Snazzylass]

Please let Fidelity set up your withdrawals plans for your regular IRA Accounts.
Bank account
Federal tax withholding

If only.... last year I did a bit of Roth conversion after consulting with a CPA (for this and some other questions). I know I requested the tax withholding from Fidelity. Did they do it? Nope! My only concern is playing fair with the IRS and giving them what they want and when they want it. It's just as easy for me to pay in April with my return.

So, companies make mistakes, too.

 

[pedro47]

If only.... last year I did a bit of Roth conversion after consulting with a CPA (for this and some other questions). I know I requested the tax withholding from Fidelity. Did they do it? Nope! My only concern is playing fair with the IRS and giving them what they want and when they want it. It's just as easy for me to pay in April with my return.

So, companies make mistakes, too.

Vanguard is different, they withhold federal taxes and setup your checking accounts. Plus, they do a yearly review of all your accounts Roth and Traditional IRA.

,

 

[SmithOp]

If only.... last year I did a bit of Roth conversion after consulting with a CPA (for this and some other questions). I know I requested the tax withholding from Fidelity. Did they do it? Nope! My only concern is playing fair with the IRS and giving them what they want and when they want it. It's just as easy for me to pay in April with my return.

So, companies make mistakes, too.

Sounds like you did it by phone because if you use the Fidelity web site you can definitely select the Federal and State tax withholding. I've done it several times. Human error happens.

 

[rapmarks]

If only.... last year I did a bit of Roth conversion after consulting with a CPA (for this and some other questions). I know I requested the tax withholding from Fidelity. Did they do it? Nope! My only concern is playing fair with the IRS and giving them what they want and when they want it. It's just as easy for me to pay in April with my return.

So, companies make mistakes, too.

I not only do tax withholding from Ira, but I send in enough withholding so I don’t have to pay quarterly taxes

 

[CalGalTraveler]

@billymach4 in addition to not sharing PII in chats, you can ask Claude to build an unpopulated spreadsheet for download to help plan for Roth Conversion or optimal retirement age. I recently had it build a model with variables on how much debt to income to guide a HELOC max to propose.Then download and populate with your actual data on your local PC to avoid sharing with the cloud

I would use Sonnet or higher so it considers all the tradeoffs and scenarios. Once built, ask Claude to fill in a hypothetical example so you can test the values and scenarios before download.

P.S I also don't trust the IRS etc. Sadly the government knows too much already.

Not perfect but I consider Anthropic the lesser of many evils. My point is that they apply IT cyber to avoid getting hacked. I trust they are trying to do the right thing when it comes to privacy because the company has an ethical culture.

I am wary of small accountancies and CFAs who do not have similar funding to build cyber defenses.

 

[billymach4]

@billymach4 in addition to not sharing PII in chats, you can ask Claude to build an unpopulated spreadsheet for download to help plan for Roth Conversion or optimal retirement age. I recently had it build a model with variables on how much debt to income to guide a HELOC max to propose.Then download and populate with your actual data on your local PC to avoid sharing with the cloud

I would use Sonnet or higher so it considers all the tradeoffs and scenarios. Once built, ask Claude to fill in a hypothetical example so you can test the values and scenarios before download.

P.S I also don't trust the IRS etc. Sadly the government knows too much already.

Not perfect but I consider Anthropic the lesser of many evils. My point is that they apply IT cyber to avoid getting hacked. I trust they are trying to do the right thing when it comes to privacy because the company has an ethical culture.

I am wary of small accountancies and CFAs who do not have similar funding to build cyber defenses.

With respect to overall public exposure across the public Internet landscape there are the endless adverts in YouTube for Incogni, Aura, DeleteMe.

Well about a year ago I gave it a go. I must say it was well worth it.
Much of the spam texts and spam calls have stopped. Especially the endless Google Security Calls whereby the caller would claim to be from Google security and claim my email had been compromised. Those were so much fun (Not really) .

Most of my other public presence had all but disappeared. It got really bad after my HR payroll system was breached for the World to see.

Perhaps this is why I get so cynical about data privacy and security.

The cause of the breach was attributed to subcontractor's laptop that had a copy of the production database. His laptop was not connected to our live network. However hackers found their way to his laptop at his home and took a copy of the production dataset.

My point here is that while the best of all organizations and corporate entities go to extreme lengths to protect and guard their systems, all it takes is one weak link to break the barrier of protection. By the way this is a common cause of many data breaches. Someone takes a copy of live data and the victim gets phished or hacked outside of the workplace network. Other examples include laptops stolen or lost. Heck even a disgruntled employee can sell the dataset. Think Ed Snowden.

Then there is the polar opposite where domestic State sponsored breaches penetrate our enemies industrial systems. Prime example is the Stuxnet virus that was a genius way to disable the Iranian nuclear program years ago. That was a clandestine mission. Just look for Stuxnet on any AI or search your choice if you are not at all familiar .


Appreciate the comparative discussion and shared tips. Keep up the good work to protect your privacy.

 

[jules54]

We need to take out quite a bit each year at age 72. I thought our investment guy said we would not need to take out much. That number $$$$? divided by 26.5 is a lot. Maybe we just wait and buy a car with that "windfall."

I understand more after reading a lot about it today.

I love love that you posted this question. I have enjoyed reading all the posts. I really don’t think we have to worry about anyone taking their financial advice from TUG. What I do enjoy is different answers to the way others handle this issue. My husband and I both have to start our mandatory withdrawals in 2027. It will be a lot of money. Then of course you have to pay taxes on the amount you withdrew from regular 401K and IRA accounts. I’ve talked to my financial advisor about rolling over some funds from my regular IRA into my Roth IRA and pay the taxes on it at that time and then watch it grow in my Roth where there will be no taxes upon withdrawal.

 

[jules54]

If you're forced to take the RMD, then it certainly makes sense to take the money out of the traditional account before you take it from a Roth. I am still a ways from retirement, but I've started looking into this and trying to figure it all out. They don't make this easy. I'll probably just get someone to manage it all for us.

Think about moving some of your traditional IRA money into your Roth IRA if you have years left before you retire. You do have to pay taxes on the amount you move, but that has the potential to still make a lot of money that is not taxable.
We do have a financial advisor, but I still try to keep on top of everything to make certain I get rid of my poor paying investments and move those to better paying investments.
I always look at it like it’s a good problem to have. There are so many people that have nothing saved for retirement that is substantial they don’t have the problem.

 

[SmithOp]

For people like myself that prefer to manage savings myself there is plenty of online information to guide you. The IRS is a trusted source, I also like Motley Fool.

Retirement plans FAQs regarding IRAs | Internal Revenue Service

Get general information about IRAs, including contributions, distributions and loans. Have other questions? Contact Employee Plans Customer Account Services.

www.irs.gov

 

[Talent312]

My brother tells me that I don't spend enuff $$.
That at my age, I should be drawing down my nest egg, not adding to it.
"What about the $$ I spend on tree cutters, home improvement and dentists?"
... That doesn't count if you're still saving $$ from current income ...
So apparently, I need to improve my lifestyle. That's where RMDs come in.

 

[billymach4]

Not sure if some of y'all take me seriously when I discuss the Cyber security end of subject matter. I just want to share this.

BOD 26-04: Prioritizing Security Updates Based on Risk | CISA

This page contains a web-friendly version of the Cybersecurity and Infrastructure Security Agency’s Binding Operational Directive 26-04: Prioritizing Security

www.cisa.gov

Background​

The United States faces persistent, increasingly sophisticated malicious cyber campaigns that threaten the public sector, private sector, and ultimately the American people’s security and privacy. The federal government must improve its efforts to protect against these campaigns by ensuring the security of information technology assets across the federal enterprise.

Cyber threat actors exploit unpatched vulnerabilities, and their use of AI may further narrow the time defenders have to react between patch release and possible exploitation. As a result, we must take immediate action to harden American networks and ensure our cybersecurity practices, including our policies for applying patches, address modern and increasingly sophisticated cyber threats. This approach focuses patching efforts on the areas of highest risk rather than treating all vulnerabilities and systems equally.

Known exploited vulnerabilities are a frequent attack vector for malicious cyber actors, including those backed by nation-states that aim to compromise U.S. critical infrastructure to steal sensitive information, disrupt operations, and undermine national security. These vulnerabilities pose significant risk to agencies and the federal enterprise.

 

[Brett]

https://www.wsj.com/personal-financ...s-learned-from-saving-for-retirement-494cf093


Readers responding to saving formula - Coast FI. - favored by young people, retirees weigh in with advice

Mostly about old people that invested in low cost index funds

"McNicholas said he became“maniacal” about saving and investing, self-directing his investments largely into index funds. “It was just restraint and discipline,”he said. “For people that are in their 20's and 30's that are grinding, it’s exactly what you’re supposed to be doing.”

 

[SmithOp]

I hope those young folks grinding are also taking time to enjoy life. Index funds, great, but if you get to RMD age and medical issues stop you from enjoying retirement, will you regret grinding away your youth?

 

[Brett]

I hope those young folks grinding are also taking time to enjoy life. Index funds, great, but if you get to RMD age and medical issues stop you from enjoying retirement, will you regret grinding away your youth?

Yes, all the retirement scenarios assume good health and living to your "life expectancy" -- which for US men is 79
Enjoy it while you can

 

["Roger"]

Yes, all the retirement scenarios assume good health and living to your "life expectancy" -- which for US men is 79
Enjoy it while you can

What counts is not the life expendency for all US men, but the life expendency for the specific year when you are executing the RMD. For example, if you were a 75 year old male today, your life expendency would be that you would live to the age 87. Your RMD for that year would be calculated using that estimate. Every year you continue to live, the life expendecy would be recalculated and extended outwards. As you continue to live (a good thing) the RMD goes upward fairly rapidly. (I can attest to this from my own experience.)

Go to this site where the Social Security administration calculates your current life expendency.

 

[joestein]

A pet peeve of mine.... CPA is a designation that allows a person to opine on Financial Statements. Really nothing to do with taxes.

I know plenty of CPAs who I wouldn't trust to do my taxes and I know plenty of non-CPAs that I would.

 

[buzglyd]

My brother tells me that I don't spend enuff $$.
That at my age, I should be drawing down my nest egg, not adding to it.
"What about the $$ I spend on tree cutters, home improvement and dentists?"
... That doesn't count if you're still saving $$ from current income ...
So apparently, I need to improve my lifestyle. That's where RMDs come in.

I’ll let you buy me all the IPAs I can drink if it helps.

 

[isisdave]

What counts is not the life expendency for all US men, but the life expendency for the specific year when you are executing the RMD. For example, if you were a 75 year old male today, your life expendency would be that you would live to the age 87. Your RMD for that year would be calculated using that estimate. Every year you continue to live, the life expendecy would be recalculated and extended outwards. As you continue to live (a good thing) the RMD goes upward fairly rapidly. (I can attest to this from my own experience.)

Go to this site where the Social Security administration calculates your current life expendency.

In this context, "life expectancy" means half will live to 87, and half will not. Some will expire at 75.1 and others at 86.9, 87.1, and 110. As I often remark, my crystal ball is in the shop.

Even with that, what matters is ability. Too many statistics focus on when our last breaths might be. What's more important is how long we'll be able to do what we want to do.