Are you withdrawing more than your required minimum distribution (RMD) from your IRA? Here is what you should be looking out for.
Have a question you want to be answered on the show? Call or text 574-222-2000 or leave a comment!
Want to speak with a Certified Financial Planner™? Visit or call 574-247-5898.
Find more information about the Wise Money Show™ at
Be sure to stay up to date by following us!
Facebook –
Instagram –
Twitter –
Want more Wise Money™?
Read our blog!
Listen on Podcast:
Subscribe on YouTube:
Mike Bernard, CFP® offers advisory services through KFG Wealth Management, LLC dba Korhorn Financial Group. This information is for general financial education and is not intended to provide specific investment advice or recommendations. All investing and investment strategies involve risk including the potential loss of principal. Asset allocation & diversification do not ensure a profit or prevent a loss in a declining market. Past performance is not a guarantee of future results….(read more)
LEARN MORE ABOUT: IRA Accounts
TRANSFER IRA TO GOLD: Gold IRA Account
TRANSFER IRA TO SILVER: Silver IRA Account
REVEALED: Best Gold Backed IRA
As you approach retirement age, you may have been diligently saving for your golden years in an individual retirement account (IRA). One key factor to consider when it comes to managing your IRA is the required minimum distribution (RMD) that you must take annually once you reach age 72.
The RMD is the minimum amount that must be withdrawn from your traditional IRA each year, based on your life expectancy and the balance of your account. Failing to take your RMD can result in hefty penalties from the IRS, so it is crucial to stay on top of this requirement.
However, some individuals may find themselves in a position where they need to withdraw more than their RMD from their IRA. There are various reasons why someone may choose to do this, such as unexpected medical expenses, home repairs, or simply wanting extra cash for lifestyle expenses.
While there is no law stopping you from withdrawing more than your RMD from your IRA, it is important to consider the potential implications of doing so. Here are some factors to keep in mind:
1. Tax implications: Any withdrawals from a traditional IRA are subject to income tax. By withdrawing more than your RMD, you may find yourself pushed into a higher tax bracket, resulting in a higher tax bill. It is important to consult with a financial advisor or tax professional to understand the tax consequences of taking extra withdrawals from your IRA.
2. Impact on future retirement income: Withdrawing more than your RMD may deplete your retirement savings faster than anticipated. This could have a significant impact on your future financial security, especially if you live longer than expected or encounter unforeseen expenses later in retirement.
3. Estate planning considerations: If you plan to leave a substantial amount of money to your heirs, withdrawing more than your RMD could diminish the value of your estate. You may want to discuss your estate planning goals with a financial advisor to determine the best strategy for managing your IRA withdrawals.
4. Alternative sources of funds: Before tapping into your IRA for additional funds, consider alternative sources of income such as savings accounts, investments, or other assets. By exploring all options, you may be able to preserve your retirement funds for longer-term needs.
In conclusion, while there are no restrictions on withdrawing more than your RMD from your IRA, it is important to carefully consider the implications of doing so. Consulting with a financial advisor or tax professional can help you make informed decisions about managing your retirement savings. By weighing the potential tax consequences, impact on retirement income, estate planning considerations, and exploring alternative sources of funds, you can make the best choice for your financial future.
It makes you worry about all the people who either don't have a financial advisor or have at some point gotten terrible financial advice and what they are doing with their money in retirement. It must be the majority of retirees with IRAs who make bad to terrible decisions on their withdrawal strategy, either by taking too much out at the wrong times or by not taking enough out and living artificially below their means (mostly the latter) And there's a million pitfalls, too much life insurance, bad annuities, hoarding cash while still taking withdrawals, all this stuff in the end results in paying more tax than you need to and sacrificing growth.
I'm not yet 73, but I do take a monthly payment, interest only, from my traditional IRA CD.
Big tax trap if you wait too long to draw down the IRA. The taxes have to be paid sometime. Sooner is sometimes better. Life includes spouses losing a mate, IRMA can get you. Take the money out and let the older people pay taxes, and gift your "family".
As stated, the tax man will eventually come for those taxes on that IRA, so if it's a large Trad. IRA, most of the time it's best to take extra out and max out that 12% tax bracket now, since tax rates are scheduled to be higher in 26. Again, it just depends on the size of the IRA. The bottom line is you take it out IF, you believe tax rates on that IRA will be higher in the future, than they are right now. In 26, tax rates go up 2-3% per bracket!
WE DON'T "SMASH" BUTTONS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I once took $10,000 from my RMD IRA when that CD matured to pay my sister in law $10,000 to not probate my deceased wife's last will and testament as a settlement to avoid litigation in chancery court and ended up paying about an additional $2000 in taxes.
Cornhole Financial?
Secure Act 2.0 upped the RMD date to 73
I wudnt be surprised if Congress makes 100% of Soc Security become taxable? They kicked the can so many times? When they finally "fix it" they may decide to tax ALL of it? Don't put it past them, it's already up to 85%