3 Ways to Lower Your RMDs Before It's Too Late

So let's start talking about the who.

Who does an RMD apply to? An RMD replies to those who are 73 or 75, depending on when you're born.

So if you're born in 1960 or after, your age is 75, that the government will start to force you to take out money.

Now remember, this used to be earlier, this used to be age 70 and a half, this then turned into 72, and now we're at the age of 73. and 75.

Now that is a benefit that they deferred it, but if you don't plan ahead, it could actually be more detrimental, forcing you to have to take out more in those later years.

We personally are a fan of them delaying those years because now it gives us more time to do tax planning, which we'll talk about later in this video of how to optimize these RMDs, to lower these RMDs, to make sure you're in the best place possible as you plan moving forward.

Now, the other thing that I really want to make a point of who these RMDs are a big concern for is especially those with pensions and a million plus or more saved.

Why is that the case? Well, that's simply because you're going to have a higher income in retirement and a higher net worth.

Only 20% of people have a pension, 10% of people have a million dollars or more saved.

So understand that your situation is different.

If your friend across the street came and talked to us without a pension, without a million dollars, I probably wouldn't tell them one of their biggest concerns should be required minimum distributions.

You may even see content on YouTube or in other places that say, don't worry about it, RMD.

That is the case, that is true for most Americans.

but not for this 2% club population that we often talk about.

This is something that we see causing them to be in higher tax brackets.

We cause them to be having to pay higher Medicare premiums, cause them to pay more in Social Security taxation.

This is something we wanna plan for ahead of time.

So let's talk about more of the what.

I've already given you a little hint, but just to overly clarify, when you get to that 73 or 75, the government is gonna force you to take out money from your tax deferred investments.

So these are any employer-responsored retirement plans, 401 , TSP, 403 , 457, we see those often.

And so based on that, they're going to say, hey, upfront, you haven't paid any tax.

You got a tax deduction upfront.

You were very happy upfront when you got that deduction.

But now this $10,000 has grown to a million dollars and you didn't pay tax on 10,000, but now you got to pay tax on a million.

And that is when people are not as happy because every withdrawal they make is going to be taxed.