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By McCreight King, CLU®, CFP®

In addition to Thanksgiving and the upcoming holiday season, it’s also the season to be sure you’ve taken any Required Minimum Distributions (RMDs) if they apply to your accounts. These are age-dependent requirements, and to keep it concise, if you were born between 1951-1959 that age is 73. If you were born after 1960, the required beginning age is 75. Impacted accounts include 401(k)s, IRAs, and other products like qualified annuities.
If the distribution dollars are not needed to fund living expenses, you have a few choices on how to take an RMD to make it the most beneficial to your situation.

1. Reinvest the now after-tax funds into a non-qualified investment account for future growth and use at a later point in time.
2. Qualified Charitable Distributions: In 2024, the IRS allows an owner of an IRA to give up to $105,000 from their IRA to a qualified charity, defraying some or all of the tax burden of the distribution. For those who are charitably inclined, this can be a very tax advantageous avenue to both give to charity directly and satisfy your required minimum distribution.
3. Reposition the after-tax RMD amounts to purchase permanent life insurance. Insurance can create immediate leverage and significantly enhance the overall benefit left to your family. The tax-free nature of the death benefit can help offset income tax and potential estate tax liabilities for your beneficiaries.

If you are currently taking, or will soon be taking RMDS, your Wealth Coach will be happy to discuss the various options that are available to you. Your accountant can also help consider the tax implications of each scenario.

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