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Did you know there are two instances where Roth accounts will have a mandated withdrawal?
Now, the good news here is that you won’t have a tax consequence from a Roth RMD. The bad news is that taking money from any account when you don’t want to (specifically a Roth IRA), is nonoptimal.
That withdrawal can no longer compound tax-free.
The Roth RMD comes from the type of Roth plan you have. Certain company-sponsored plans are subject to the normal RMD rules. Luckily, avoiding this specific RMD is very simple. We discuss how in this video…
The second Roth RMD comes from inheritances. Now inherited IRA rules have become a bit more complex in recent years.
Certain retirees are able to maintain a stretch IRA and therefore have stretched RMD rules while others now have to follow the SECURE Act 10-yr distribution rules.
In both cases, however, these lead to inherited Roth RMD. On varying schedules, you will be forced to take from your inherited Roth account until exhausted.
RMD rules can be a bit complex at times and understanding RMD tax implications only builds on to this complexity.
But watch this video as we clear some of these complexities up and help you avoid and minimize the RMD effect moving forward in your retirement.
#RetirementIncomePlanning #RMD
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Write an article about The 2 Situations Where You Will Have an RMD From Your Roth Accounts… in English
Eric thanks for the continued great information! Planning to retire this year (65) and have an employer Roth 401K. Due to income I've not been able to invest in a standard Roth. So looks like I'll need to roll this over this year so I can have access to this by the time I reach my early 70's!
If the children inherited an Roth IRA from the parents after 2020, can the children rollover the RMD of parents' Roth IRA to the children's Roth IRA? Thanks!
Kitces webinar last week is saying proposed IRS rules are clarify when there is an rmd or not with 10 year rule. It depends on if retirement owen died before their rmd date or not. Complicated stuff
Great video, short, precise with example….really appreciate your free service to fellow citizens.
Safeguard Wealth Management, I do understand this, but most government things can get confusing. Thanks.
Great video, Eric. Is there any reason not to rollover a 401K to an IRA (both deferred and Roth), other than the 5 year Roth IRA rule?
I have a Roth 401k. Opened a Roth IRA at age 55. Can I roll the Roth 401k into the Roth IRA at age 60 and have immediate access or do I need to wait 5 years?
I don't think I will need access to those funds but would like to know the answer to my question just in case.
I was interested in the link to the video on the 5 year rule but couldn’t find it anywhere on the video. Was it just me?
Eric is so dialed in on all this.
Great video! might be a few government retirees getting shocked!
Eric, great video. Because words matter (and the government obfuscates words) . . . consider further clarity. The government does not use the words ROTH 401k for it's Thrift Savings Plan (TSP) Roth. Thus, there is misunderstanding among millions in the military and civil service that they do not have RMDs on their TSP Roth account. Unfortunately, those folks will figure it out after age 72, after a 50% tax penalty, and after the correction zone where they can do anything (forward looking tax planning) about it. If I'm wrong shout me down. Best.
if you are designated beneficiary (brother) that is less then 10 year younger them the person that pass away can you take RMD over your life time for ROTH? also if the roth account was made 3 year ago is the gains still tax free?
Another great video from Eric at Safeguard Wealth Management!
Thanks Eric!