{"id":134219,"date":"2024-12-07T04:48:51","date_gmt":"2024-12-06T21:48:51","guid":{"rendered":"https:\/\/hotvideos24.online\/?p=134219"},"modified":"2024-12-07T04:48:51","modified_gmt":"2024-12-06T21:48:51","slug":"what-to-know-before-taking-your-first-required-minimum-distribution","status":"publish","type":"post","link":"https:\/\/hotvideos24.online\/?p=134219","title":{"rendered":"What to know before taking your first required minimum distribution"},"content":{"rendered":"<p> <script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<\/p>\n<div id=\"SpecialReportArticle-ArticleBody-6\" data-module=\"ArticleBody\" data-test=\"articleBody-2\" data-analytics=\"SpecialReportArticle-articleBody-6-2\"><span class=\"HighlightShare-hidden\" style=\"top:0;left:0\"\/><\/p>\n<div class=\"InlineImage-imageEmbed\" id=\"ArticleBody-InlineImage-107375072\" data-test=\"InlineImage\">\n<div class=\"InlineImage-wrapper\">\n<div>\n<p>Grace Cary | Moment | Getty Images<\/p>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>After decades of building your nest egg, you will eventually have to start taking <a href=\"https:\/\/www.cnbc.com\/2024\/10\/07\/required-minimum-distributions-dont-need-money.html\">required minimum distributions<\/a>, or RMDs, from <a href=\"https:\/\/www.cnbc.com\/2024\/07\/02\/reduce-taxes-on-retirement-income.html\">pretax retirement accounts<\/a>. The first RMD can be tricky, according to financial experts.<\/p>\n<p>Since 2023, most retirees must begin RMDs at age 73. The first deadline is April 1 of the year after you turn 73, and Dec. 31 for future withdrawals. This applies to tax-deferred individual retirement accounts, most 401(k) and 403(b) plans.<\/p>\n<p>&#8220;You want to be tactical and savvy when you take the [first] distribution,&#8221; said certified financial planner Jim Guarino, managing director at Baker Newman Noyes in Woburn, Massachusetts. He is also a certified public accountant.\u00a0<\/p>\n<\/div>\n<div class=\"group\">\n<div class=\"RelatedContent-relatedContent\" id=\"SpecialReportArticle-RelatedContent-1\">\n<div class=\"RelatedContent-container\">\n<div class=\"RelatedContent-nonCollapsibleContent\">\n<h2 class=\"RelatedContent-header\">More from FA Playbook:<\/h2>\n<div class=\"group\">\n<p>Here&#8217;s a look at other stories impacting the financial advisor business.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"group\">\n<p>Pre-tax retirement withdrawals incur <a href=\"https:\/\/www.cnbc.com\/2024\/10\/22\/irs-2025-federal-income-tax-brackets.html\">regular income taxes<\/a>. By comparison, you&#8217;ll pay long-term <a href=\"https:\/\/www.cnbc.com\/2024\/10\/22\/irs-2025-federal-income-tax-brackets.html\">capital gains taxes<\/a> of 0%, 15% or 20% on profitable assets owed for more than one year in a brokerage account.\u00a0\u00a0<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\"><a id=\"headline0\"\/>Two required withdrawals in one year<\/h2>\n<div class=\"group\">\n<p>If you wait until April 1 after turning 73 to take your first RMD, you&#8217;ll still owe the second one by Dec. 31. That means you&#8217;ll take two RMDs in the same year, which can significantly boost your <a href=\"https:\/\/www.irs.gov\/filing\/adjusted-gross-income\" target=\"_blank\" rel=\"noopener\">adjusted gross income<\/a>.<\/p>\n<p>That can trigger unexpected tax consequences, according to CFP Abrin Berkemeyer, a senior financial advisor with Goodman Financial in Houston.<\/p>\n<\/div>\n<div class=\"group\">\n<p>For example, boosting AGI can lead to income-related monthly adjustment amounts, or IRMAA, for <a href=\"https:\/\/www.ssa.gov\/benefits\/medicare\/medicare-premiums.html\" target=\"_blank\" rel=\"noopener\">Medicare Part B<\/a> and Part D premiums. For 2024, IRMAA kicks in once modified adjusted gross income, or MAGI, exceeds $103,000 for single filers or $206,000 for married couples filing together.<\/p>\n<p>&#8220;That&#8217;s the biggest one that catches retirees off guard,&#8221; Berkemeyer said.<\/p>\n<p>With a higher AGI, lower-earning retirees could also incur <a href=\"https:\/\/www.cnbc.com\/2024\/02\/25\/why-social-security-beneficiaries-may-owe-more-taxes-on-benefits.html\">higher Social Security taxes<\/a> or increase their long-term <a href=\"https:\/\/www.cnbc.com\/2024\/10\/22\/irs-2025-capital-gains-brackets.html\">capital gains bracket<\/a> from 0% to 15%, he said.<\/p>\n<\/div>\n<h2 class=\"ArticleBody-subtitle\"><a id=\"headline1\"\/>When to defer your first distribution<\/h2>\n<div class=\"group\">\n<p>If you&#8217;re age 73 and just retired in 2024, it could make sense to delay your first RMD until April 1, because 2025 could be a lower-income year, experts say.\u00a0<\/p>\n<p>However, your RMD is calculated using your pre-tax retirement balance as of Dec. 31 from the prior year, meaning 2025 RMDs are based on year-end 2024 balances. The calculation divides your previous year-end pretax balance by an IRS <a href=\"https:\/\/www.irs.gov\/retirement-plans\/plan-participant-employee\/retirement-topics-required-minimum-distributions-rmds\" target=\"_blank\" rel=\"noopener\">life expectancy factor<\/a>.<\/p>\n<p>That could mean a larger-than-expected RMD for 2025 &#8220;if your [2024] portfolio went through the roof,&#8221; Guarino warned.\u00a0<\/p>\n<p>&#8220;You really have to run the numbers&#8221; to see if it makes sense to incur more income in 2024 or 2025, based on account balances and tax projections, he said.<\/p>\n<\/div>\n<\/div>\n<p><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-3711241968723425\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-format=\"fluid\"\r\n     data-ad-layout-key=\"-fb+5w+4e-db+86\"\r\n     data-ad-client=\"ca-pub-3711241968723425\"\r\n     data-ad-slot=\"7910942971\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><br \/>\n<br \/><div data-type=\"_mgwidget\" data-widget-id=\"1660802\">\r\n<\/div>\r\n<script>(function(w,q){w[q]=w[q]||[];w[q].push([\"_mgc.load\"])})(window,\"_mgq\");\r\n<\/script>\r\n<br \/>\n<br \/><a href=\"https:\/\/www.cnbc.com\/2024\/12\/06\/first-required-minimum-distribution.html\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Grace Cary | Moment | Getty Images After decades of building your nest egg, you will eventually have to start taking required minimum distributions, or RMDs, from pretax retirement accounts. &hellip; <a href=\"https:\/\/hotvideos24.online\/?p=134219\" class=\"more-link\">Read More<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-134219","post","type-post","status-publish","format-standard","hentry","category-business","entry"],"_links":{"self":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/134219","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=134219"}],"version-history":[{"count":0,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=\/wp\/v2\/posts\/134219\/revisions"}],"wp:attachment":[{"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=134219"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=134219"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hotvideos24.online\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=134219"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}