Retirement

Decisions, decisions on distributions

DATE | 11/18/19

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Time is running out to decide on what you're going to do with the required minimum distributions from your retirement account this year.

Your required minimum distribution (RMD) is the minimum amount you must withdraw from your account each year, but you can choose to withdraw more. You generally have to start taking withdrawals from your IRA, SEP IRA, SIMPLE IRA, and your retirement plan account at age 72 (age 70½ if reached prior to January 1, 2020) or the calendar year you retire from an employer through which you contributed. Roth IRAs do not require withdrawals until after the death of the owner.

If you’re not sure what to do with your RMD by December 31, we have a few ideas for you.

Donate

Did you know you can choose to give up to $100,000 to a qualified charity from your Individual Retirement Account (IRA) without counting it as taxable income when you are over 70 ½ years old? This type of gift is called a qualified charitable distribution (QCD). It’s not only a powerful incentive for charitable giving, it also has tax benefits. QCDs count as IRA distributions, so they can be used to satisfy all or some of your required minimum distribution (RMD) for the calendar year.

Member Benefits requires you to complete a specific form if you wish to take advantage of this IRA option. Consider giving a donation to WEA Member Benefits Foundation or one or more of your favorite charities.

Reinvest

If you don’t need the funds for necessities, consider opening a Personal Investment Account with Member Benefits. It’s a way to invest your money outside of a retirement account without using a cash account such as savings, checking, or certificates of deposit. You can choose from individual, joint, UTMA, or trust accounts.

Ask us about the tax benefits of this type of account. For more information, visit the Personal Investment Account page.

Give

The Uniform Transfers to Minors Act (UTMA) provides an avenue for a grandparent, parent, aunt, and/or uncle to make monetary gifts to a minor. Or consider making a contribution to a 529 college savings plan (in Wisconsin, visit Edvest).

Transfer

If you have a Roth 403(b), you can roll the money into a Roth IRA, which has no RMDs for the original owner. You can also convert your Traditional IRA, Roth IRA, or pre-tax 403(b), but you will owe tax on the conversion.

Give us a call at 1-800-279-4030 if you have questions. As with most IRS provisions, we encourage you to work closely with your tax advisor to determine what would work best for your specific situation.