For the latest thinking on retirement strategies, you’ll want to join the Insights from Fidelity Wealth Management team on November 9. We’ll give you our perspective on require minimum distributions (RMDs), Roth IRA conversions, the implications of the SECURE Act, and more.
This must-see webinar will cover the following topics related to retirement:
• Strategies for managing your required minimum distributions
• Tax considerations for Roth conversions
• Implications of the SECURE Act
• Choosing tax-smart accounts for your investments
• Setting up a tax-efficient drawdown strategy
Questions? Drop them below 👇 and we’ll reply right in the comments.
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Insights Live: Strategies For RMDs, Roth IRAs, And More | Fidelity Investments
Fidelity Investments, one of the leading providers of financial services and investment management, recently hosted a virtual event called Insights Live: Strategies For RMDs, Roth IRAs, And More. The event brought together a panel of experts to discuss retirement planning strategies, including required minimum distributions (RMDs), Roth IRAs, and other important topics.
RMDs are a crucial aspect of retirement planning for many individuals. Once you reach the age of 72, the IRS requires you to start taking withdrawals from your traditional IRA or other retirement accounts. These withdrawals are known as RMDs, and failing to take them can result in substantial penalties. The panel at Insights Live discussed strategies for managing RMDs, such as taking advantage of qualified charitable distributions (QCDs) or considering Roth IRA conversions to reduce future RMDs.
Roth IRAs were also a key topic of discussion at the event. Unlike traditional IRAs, Roth IRAs allow for tax-free withdrawals in retirement, making them an appealing option for many investors. The experts at Insights Live provided insights into the benefits of Roth IRAs, including the ability to leave a tax-free inheritance for your heirs and the flexibility to continue making contributions even after age 72.
In addition to RMDs and Roth IRAs, the panel at Insights Live covered a range of other important retirement planning topics. This included discussions on how to maximize Social Security benefits, the impact of health care costs in retirement, and the importance of creating a diversified investment portfolio.
Fidelity Investments is committed to providing its clients with the education and resources they need to make informed financial decisions. Insights Live is just one example of the many events and tools that Fidelity offers to help individuals plan for a secure retirement.
For those who were unable to attend the live event, Fidelity offers a recording of the discussion on their website, along with additional resources and tools to help with retirement planning. This includes calculators to estimate RMDs and Roth IRA conversion potential, as well as educational articles and videos on a wide range of financial topics.
In conclusion, retirement planning is a complex and critical aspect of personal finance. Events like Insights Live: Strategies For RMDs, Roth IRAs, And More, hosted by Fidelity Investments, provide valuable insights and advice from experts in the field. Whether you are approaching retirement or are already in the midst of it, taking advantage of these resources can help you make the most of your retirement savings and achieve a financially secure future.
At 31:48 you talk about a "5-year aging rule", something that's usually referred to as a 5-year clock, on Roth IRA conversions. That 5-year rule only matters if you are younger than 59 1/2 when you want to take a non-qualified distribution. In that case you might owe a penalty.
However, if you are already 59 1/2 and you have had a Roth IRA open and funded for at least 5 tax years, then all of your Roth IRA distributions are qualified and therefore no taxes or penalties are due on any money you withdraw even if you just did your first Roth IRA conversions the day before.
If you optimize asset location by placing your fixed income in Traditional (pre-tax) accounts, market declines shouldn't present much of a problem for RMDs because fixed-income assets tend to be less volatile than stock market assets.
I retired at 56 and all of my fixed income is in my (pre-tax) 401(k), except for a few months of spending cash sitting in a taxable money market fund. In most historical scenarios bonds under perform stocks over long periods – usually outperforming inflation by only a few basis points. This means small Roth conversions should be able to lower my pre-tax balance in 2023 dollars over time, reducing my future RMDs.
The lower volatility of bonds and other fixed income also means I don't need to worry too much about market fluctuations during RMDs, especially since I suspect by the time I'm 75 my pre-tax account will be 100% bonds. My 401(k) is already 67% fixed income with my Roth IRA and taxable accounts all stock, with a de minims amount in cash. (And no, I'm not interested in annuities.)