SIMPLE IRA’s
Is there an advantage or disadvantage to my client that is going to be 70 1/2 this year continuing his contributions to their SIMPLE plan even though he has to take RMD’s this year too? His total RMD is $10,957 but the RMD from his SIMPLE is $4,564.
Permalink Submitted by Alan - IRA critic on Fri, 2019-02-08 19:41
He should still contribute if he wants to build his retirement plan balance and reduce current taxes. His RMD for the SIMPLE IRA will increase far less than the amount being contributed. For example, if he contributes 10,957 this year his 2020 RMD will only increase by about 400 and his contribution this year will offset taxes on his entire RMD for all his IRAs.