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Are Your Allocations Right For RMDs

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Are Your Allocations Right For RMDs

There is an ideal order in which to pull from retirement accounts when taking IRS Required Minimum Distributions (RMD). The goals, which often go unheeded, are to minimize taxes, minimize taking principal, and earn as much as possible. These goals are easy enough to understand, but there are many factors to consider. It takes a well-planned strategy to ensure the interest and dividends you’re generating from your savings and investments are sufficient enough to cover your RMDs, keep your
tax bill at a minimum, and satisfy your other expenses throughout retirement.

Again, RMDs are distributions the IRS requires you to make on your retirement savings each year after you’ve reached age 72. The amount changes each year in conjunction with your life expectancy and the balance of your IRAs and other qualified plans as of December 31 of the preceding year.