4 Ways to Manage Your Required Minimum Distributions (RMDs) When You Don’t Need the Money
It’s that time of year again… If you are over 70 ½ then you know that it is RMD season! In traditional retirement accounts, the IRS requires you to take minimum distributions once you turn 70 ½. It’s inevitable and there is no way around it… Many people find themselves in similar situations during this time: they are receiving too much money! Yes, too much money… After much of your life is spent saving, many retirees find it difficult to shift gears and start spending – leaving them with more money than they know what to do with when they’re required to start making withdrawals. So, what do you do with that money? Here are 4 options that can help you make that decision:
1. Make a qualified charitable donation.
2. Reinvest the RMD in a money-market account or another investment vehicle.
3. Reduce RMD amounts by converting a portion of your traditional IRA to a Roth IRA.
4. Decrease RMDs by purchasing a qualified longevity annuity contract.