Withdrawing RMDs from mutual funds
I have eight different mutual funds in eight different TIRAs. When I become 70 and 1/2 years old, will the mutual fund companies automatically withdrawal my RMDS?
I have eight different mutual funds in eight different TIRAs. When I become 70 and 1/2 years old, will the mutual fund companies automatically withdrawal my RMDS?
Permalink Submitted by Alan Spross on Wed, 2011-11-23 21:31
No, but they may work with you to help you determine your RMD and how you want to satisfy it. Once you determine your total RMD, you can take it in any combination you want over the 8 TIRA accounts and therefore you could take the entire RMD from just one of those accounts. In addition, you can take the RMD in cash or in shares transferred to your taxable brokerage or other taxable account. In the year you reach 70.5, your first distribution is applied against your RMD. Therefore you cannot do an indirect rollover or Roth conversion until after your total RMD for all accounts has been satisfied.
It will probably be easier to avoid having 8 different distributions to process to meet the RMD.
In the year you reach 70.5, you have a choice to take your first RMD in that year or to defer it to the following year prior to April 1st. If you defer it, then you will have to take two RMDs in the second year and you may not wish to have that spike in your taxable income in the second year.
Permalink Submitted by Richard Partin on Fri, 2011-11-25 19:51
Thanks Alan for your help.