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Joe Jaspers, CFP®
Vice President, Wealth Management
Carolinas Telco Capital Advisors
Located at Carolinas Telco FCU
9813 South Blvd, Suite 101
Charlotte, NC 28273
Phone: 704-391-5600
Toll Free: 800-622-5305, ext. 2608
Fax: 704-556-1652
Email: joe.jaspers@lpl.com
January/February 2020
Tax-Smart Retirement Distributions
Before you retire, consider planning for your required minimum distributions (RMDs). This can be more complicated than you imagine if you have significant retirement assets in qualified plans, such as 401(k) accounts and IRAs, but you can achieve a tax-friendly result with a little planning.
Know the Rules
Generally, you must begin taking RMDs by April 1 of the year after you reach age 70 ½ and by December 31 of each subsequent year. Your tax professional can help you determine your RMD amount, which typically is calculated by dividing the balance subject to RMDs by your life expectancy.Different rules apply if your spouse is the sole beneficiary and at least 10 years younger than you. There are stiff tax penalties that apply on RMD amounts not taken.
Easing the Bite
Use the years before age 70 ½ to help ease the potential size and subsequent tax bite on eventual RMDs. For example, consider converting some traditional IRA assets to a tax-free Roth IRA during lower-income years, to limit the future income tax bite (you’ll pay ordinary income tax upon conversion). Or invest some IRA money in a Qualified Longevity Annuity Contract (QLAC), which can delay required payments for several more years.Deducting up to 60% of your adjusted income annually for charitable contributions can also help reduce the tax bite.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Carolinas Telco FCU and Carolinas Telco Capital Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Carolinas Telco Capital Advisors, and may also be employees of Carolinas Telco FCU. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, Carolinas Telco FCU or Carolinas Telco Capital Advisors. Securities and insurance offered through LPL or its affiliates are:
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