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- Hopeful Ever After #004
Hopeful Ever After #004
December 2024
Carolyn Howard, CFP®
December 18, 2024 • Estimated Reading Time: 6 minutes
Hello all my hopeful people!
Let’s get this out of the way: for many of us, holidays can be some of the toughest times of the year. Traditions aren’t the same without your life partner next to you, and once-happy memories can become triggers for sadness and even depression.
One thing I’ve learned on my own journey with grief is that there’s no better cure for sadness than trying to make some else’s life a little bit brighter.
Look for ways to honor your loved one by bringing some joy into the lives of others who might be struggling, too.
Whether you’re donating your time, talent, or resources to a local charity or cooking a meal for the new mom in your neighborhood, making the effort to actively find joy through giving is one of the most surprising ways to lift your spirits during the holiday season.
Merry Christmas and a Happy New Year!
Ever hopeful,
Carolyn
❝
Death leaves a heartache no one can heal, love leaves a memory no one can steal.”
- Richard Puz
Financial Jargon Made Easy
Required Minimum Distributions (RMDs)
The minimum amount you must withdraw annually from certain retirement account when you reach a specific age.
Under current laws, that age is 73 (it will go up to 75 in 2035).
A Lesson from Steven
Steven is a 73-year old widowed client who is semi-retired. He had both a traditional IRA and a SEP-IRA from his employer, and he was uncertain how he should go about dealing with his RMDs.
He was planning on making a single withdrawal from just one of the accounts to satisfy the RMD amounts for both. He also wanted to know if he needed to take the distribution this year or if he could wait until 2025.
We were able to help him avoid, in his words, “a big mistake” by advising him to make separate withdrawals from both his IRA and SEP-IRA (you are only able to combine these into a single transaction if the account types are EXACTLY the same).
Since Steven was no longer contributing to his SEP-IRA, we advised him to roll in into his traditional IRA, which would simplify his RMDs by having a single account.
As far as taking his first RMDs this year vs. next year, it’s really a question of tax. He has until April 1 of next year to take his first RMDs, but this means he’ll be taking TWO RMDs in 2025, which could push him into a higher tax bracket.
Takeaway
When appropriate, consolidating your retirement accounts can be a great way to simplify your RMDs.
If you’d like advice on your RMD situation, feel free to schedule a call.
This Month’s Financial Tip
Make Sure Your RMD Amounts are Correct
Knowing how much to withdraw annually from your retirement accounts is as important as knowing when.
The IRS has special tables and worksheets to determine exactly what your RMDs should be.
Gif by fleischerstudios on Giphy
Yup, there’s a lot to digest here. If you’d like some help with your retirement accounts or RMDs, I’m happy to chat.
You can also call me at 941-841-6564 or email me at [email protected] if you prefer.
