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IRA & Retirement Planning Topics

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Required Minimum Distributions (RMDs)

Choosing the Right Financial Advisor in 5 Easy Steps

Preparing for retirement can be overwhelming, and between tax, estate, insurance, and investment planning, some important aspects of your financial plan can be easily overlooked if you’re not working with a competent professional. A qualified financial advisor can help you ensure that all items are being considered, but not all advisors are created equal. So how do you decide who to work with?

With endless options available, choosing a financial advisor can be difficult. However, there are certain qualities to look for to help you narrow down your choices and make sure you find a qualified advisor that best fits your needs.

Why do you need a financial advisor? Today’s financial landscape is as complicated as ever. A good financial advisor can help you navigate this complexity so that you can make educated, informed decisions on what is best for you and your family. 

1. Ask for references. Ask your CPA or estate planning attorney. In many cases, they already have a working relationship with a financial advisor. You should also consider asking friends and family members for a recommendation if they are in a similar stage of life and financial situation. 

2. Don’t overemphasize credentials. It seems as though there are many credentials available to financial advisors. Some credentials require significant levels of education, passing scores on exams and adherence to strict codes of professional conduct. Many credentials, however, can be earned with virtually no effort or education at all. The bottom line is that the decision of what financial advisor to hire should be made based on more than just the letters after their name. 

3. Find a specialist. The term “Financial Advisor” is highly generic and can be used to describe many different types of professionals in the financial services field. When shopping around, find an advisor who specializes in your area of concern. If you had a heart problem, would you rather see your family doctor or a cardiologist? The same principle should apply to your financial advisor. 

4. Ask about education/training. Most financial advisors routinely participate in what are called “advanced training” classes. Many times these classes are heavy on sales training and light on “real” education. If you really want to know what your advisor has studied, ask to see the manual from the last educational conference he or she attended. If it has more sales information than technical information... Beware!

5. Don’t be afraid to get a second opinion. Your IRA, 401(k) or other retirement account may be the largest single asset you own. If you’re not sure about the advice you’ve been given, don’t be afraid to get a second opinion. If an advisor tells you that there’s no need for one, they’re probably not confident in the information and recommendations they provided to you in the first place. 

Questions? Click here to contact the office nearest you.

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What You Need to Know About Your Required Beginning Date (RBD)

You’ve likely already heard about required minimum distributions (RMDs), but do you know what your required beginning date (RBD) is? Your RBD is the date by which you must begin to take RMDs from your retirement account if you have an IRA or employer plan. It is important to note that the rules differ depending on the type of retirement account you have and whether you are the account owner or the beneficiary.

Click here for more on what you need to know about your required beginning date (RBD).

What is the Required Beginning Date?

This is your due date for beginning to take required minimum distributions (RMDs) from your retirement account if you have an IRA or employer plan. The rules differ depending on the type of retirement account you have or if you are the account owner or the beneficiary.


  • The RBD for IRA owners is April 1 of the year after you turn age 70 ½.
  • You may not have a required distribution in the year you turn 70. It all depends on your birthday. June 30 (halfway through the year) is the cut-off to determine if you use age 70 or age 71 to calculate your distribution.
  • You can defer your first RMD until April 1 of the year after you turn age 70 ½. However, that means you would be taking two RMDs in the same year.

There are drawbacks to waiting:

  • You may pay a higher tax rate.
  • More of your Social Security income could become taxable.
  • You may lose tax exemptions and deductions. Schedule a meeting to determine if this is the right move for you.


The rules are generally the same as the IRA RBD, except for the “still working exception.”

You don’t have to take an RMD:

  • If you work past age 70 ½;
  • And you are covered by an employer plan of your current employer;
  • And the employer plan allows the exception.

The RBD is April 1 of the year after separation from service. If you separate from service this year, you can defer the 2018 RMD until April 1, 2019.

The exception does not apply to other employer plans or IRAs you may have. You MUST still take RMDs from those other plans.

Exceptions to the exceptions: If you own more than 5% of the company for which you work, you must take an RMD. If you have an employer SEP or SIMPLE IRA, you must follow the IRA rules, which means, you must take an RMD at age 70 ½.


If you inherit a retirement plan from an individual who passed away prior to his or her required beginning date, you will not have to take an RMD for the year of death.

The RBD matters after an account owner dies when the estate is the beneficiary of the IRA at death.

  • If the IRA owner dies before his or her RBD, the distribution period follows the 5-year rule.
  • If the IRA owner dies on or after his or her RBD, the distribution period is the remaining life expectancy of the IRA owner.

The RBD for a named non-spouse beneficiary is December 31 of the year after the account owner’s death. The RBD for a named spouse beneficiary varies. Call me to discuss your situation.

Have more questions about your retirement account distributions? Click here to contact the office nearest you.

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Calculating your RMD (Required Minimum Distribution)

One of the greatest advantages of retirement savings accounts are the opportunities for tax-deferred or tax-free growth; however, the government sets a time limit on how long these benefits can last by way of establishing required minimum distributions (RMDs). An RMD is the minimum amount that must be taken out of your retirement accounts each year, typically beginning in the year that you turn 70½.

Taking your first RMD can be a daunting endeavor as you attempt to navigate the complex rules and regulations surrounding your retirement account and, unfortunately, one wrong move could leave you facing a 50% penalty. Taking the right steps to calculate your RMD correctly can help ensure you avoid any costly mistakes. 

To avoid unnecessary tax penalties, click here to download “Calculating your RMD in 5 Easy Steps.”

For professional assistance with your RMD calculations and distribution requirements, click here to contact the office nearest you.

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Fixing a Missed RMD in 5 Easy Steps

Once you reach age 70½ , the government requires that a specific minimum amount be withdrawn from your retirement account each year. If you miss the deadline or don’t take enough, Uncle Sam could hit you with a 50% penalty!

Did you forget to take a required minimum distribution (RMD) from your retirement account?

Unsure of how to fix the error? Make sure to consult your adviser as soon as possible. Click here to contact us. Fortunately, you’re not the first person to forget to take a distribution. There are steps you can take to fix the problem and possibly even get the penalty waived. We are here to help you do that. 

What is a missed RMD (required minimum distribution)?

RMDs must be taken by IRA owners beginning in the year they turn age 70 ½ and by IRA and non-spouse Roth beneficiaries beginning in the year after the death of the account owner.  RMDs not taken are subject to a penalty of 50% of the amount not taken each year.

When should you look for a missed RMD?

You should look for a missed RMD every year after an account owner turns age 70 ½ and when an IRA or non-spouse Roth beneficiary inherits an IRA.  Ask your advisor to double check any calculations to be sure they are correct.

#1 - Look at the balance sheet.  Determine the prior year-end IRA balance for the year that an RMD was not fully satisfied.  (Note: There were no IRA RMDs for 2009.)

#2 - Determine the life expectancy factor for all missed years.  IRA owners use their age each year and look up the corresponding factor on the Uniform Lifetime Table.  Non-spouse IRA beneficiaries use their age only in the year after the account owner’s death and look up the corresponding factor on the Single Life Expectancy Table.  In each subsequent year, a beneficiary will subtract one from the previous year’s factor.  (Remember: These are the general rules for determining life expectancy factors.  There are many exceptions to these rules.)

#3 - Do some simple math.  Divide the account balance by the life expectancy factor for each missed year’s RMD and withdraw that amount from the IRA.

#4 - Important forms to file.  File IRS Form 5329 for each missed RMD to report the missed distribution and penalty.  The penalty can be waived for good cause.  Attach a letter to the form requesting a waiver.  It is helpful to include language in your letter explaining to the IRS why the distributions were missed, that the problem has been corrected and that procedures are in place to avoid future problems.

#5 - It will never happen again.  Set up procedures to ensure you take future RMDs.  Many custodians offer an option to distribute RMDs automatically each year.  If you struggle to remember to take your RMD, setting up an automatic distribution may be beneficial.

Remember, we are here to guide you through protecting your hard earned assets. Click here to contact us. 

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