Vanguard has a free online calculator to estimate a required minimum distribution (RMD) from an inherited IRA based upon current law provisions including the provisions that were changed by the Secure Acts.
The link to the calculator is in the body of the Vanguard article.
IRS Pub 590-B, noted in the Vanguard article, is updated annually on the topic of required RMDs and and the various criteria for determining your RMD amount for a particular year.
I would expect your plan custodian would ask for the same data as Vanguard and if Vanguard and the amount determined by the plan custodian varies I would want to try to find out why.
“A Roth IRA can be accessed anytime for any reason and is tax- and penalty-free” is the primary reason my spouse and I funded Roth IRAs. However, there are some IRS rules about Roth withdrawals. The article also states that “A traditional IRA may be the best option if you’re planning on donating your IRA to charity.” I agree because it is possible to gift directly out of the traditional IRA with no penalty and such gifting to charity does not count toward RMDs.
Here is my experience. I saved via a Roth because of the flexibility it offers. I used social security income to continue to fund a Roth into retirement. I had decided to go into a gradual retirement and continued to work for another 10 years, well beyond normal retirement age. As I reduced my work and income dwindled, I took social security. I was able to continue to fund the Roth because of my earnings. I realize there were tax consequences, and one does need to be mindful of SSA’s approach to excess earnings.
I was lucky because the stock market was a favorable place to invest.
I took advantage of the Roth tax rules in 2023. I had been diagnosed with a serious illness in 2022 which resulted in unexpected, large medical bills, lifestyle changes and permanent relocation. With a high level of financial uncertainty and significant expenses, I took a withdrawal from the Roth in 2023.
My annual withdrawal rate had been about 3.5% from traditional accounts. However, this increased to the equivalent of 8.5% because of the sizeable Roth withdrawal. There was no federal tax consequence, and so I remained in the lowest tax bracket of 12%.
It wasn’t necessary to spend all of those funds. With the return to normal interest rates on savings we were able to purchase CDs with a portion of the excess, as well as some I-Bonds. I do also attribute this to luck as I was able to get what I consider to be a reasonable return without investing in the stock market and deal with that uncertainty and possible volatility.
Yes, it would have been better to withdraw from the Roth in small increments, but I was so sick I really didn’t have the capacity to deal with it.
That is our plan. We took SS at our full retirement age and are using it SS income to funds our Roth accounts, and keep filling our spending, checking, and car ” buckets”
We, actually I as my wife has no interest (despite my efforts) in investing, are using money we inherited from my parents to fund our living expenses, and then our retirement assets if necessary to essentially buy larger inflation adjusted monthly annuity (ie Social Security) payments. Once we claim at 70 we will be receiving 84k per year which right now is enough to cover all of our living expenses. Then our retirement assets will all be fun money. Also by using my parents money to fund retirement until those funds run out will allow me to close out accounts at three different fund companies. All of our funds will then be at Vanguard which will be easier for our executor.
Believe me when I say that those who propose condensing your funds into one company are right. I have been dealing with three fund companies and traditional and Roth accounts which can be difficult keep straight. Don’t get me wrong it’s a nice problem to have but difficult to get my head around.
Vanguard has a free online calculator to estimate a required minimum distribution (RMD) from an inherited IRA based upon current law provisions including the provisions that were changed by the Secure Acts.
https://investor.vanguard.com/investor-resources-education/retirement/rmd-rules-for-inherited-iras
The link to the calculator is in the body of the Vanguard article.
IRS Pub 590-B, noted in the Vanguard article, is updated annually on the topic of required RMDs and and the various criteria for determining your RMD amount for a particular year.
I would expect your plan custodian would ask for the same data as Vanguard and if Vanguard and the amount determined by the plan custodian varies I would want to try to find out why.
I hope this helps.
Best, Bill
“A Roth IRA can be accessed anytime for any reason and is tax- and penalty-free” is the primary reason my spouse and I funded Roth IRAs. However, there are some IRS rules about Roth withdrawals. The article also states that “A traditional IRA may be the best option if you’re planning on donating your IRA to charity.” I agree because it is possible to gift directly out of the traditional IRA with no penalty and such gifting to charity does not count toward RMDs.
Here is my experience. I saved via a Roth because of the flexibility it offers. I used social security income to continue to fund a Roth into retirement. I had decided to go into a gradual retirement and continued to work for another 10 years, well beyond normal retirement age. As I reduced my work and income dwindled, I took social security. I was able to continue to fund the Roth because of my earnings. I realize there were tax consequences, and one does need to be mindful of SSA’s approach to excess earnings.
I was lucky because the stock market was a favorable place to invest.
I took advantage of the Roth tax rules in 2023. I had been diagnosed with a serious illness in 2022 which resulted in unexpected, large medical bills, lifestyle changes and permanent relocation. With a high level of financial uncertainty and significant expenses, I took a withdrawal from the Roth in 2023.
My annual withdrawal rate had been about 3.5% from traditional accounts. However, this increased to the equivalent of 8.5% because of the sizeable Roth withdrawal. There was no federal tax consequence, and so I remained in the lowest tax bracket of 12%.
It wasn’t necessary to spend all of those funds. With the return to normal interest rates on savings we were able to purchase CDs with a portion of the excess, as well as some I-Bonds. I do also attribute this to luck as I was able to get what I consider to be a reasonable return without investing in the stock market and deal with that uncertainty and possible volatility.
Yes, it would have been better to withdraw from the Roth in small increments, but I was so sick I really didn’t have the capacity to deal with it.
That is our plan. We took SS at our full retirement age and are using it SS income to funds our Roth accounts, and keep filling our spending, checking, and car ” buckets”
We, actually I as my wife has no interest (despite my efforts) in investing, are using money we inherited from my parents to fund our living expenses, and then our retirement assets if necessary to essentially buy larger inflation adjusted monthly annuity (ie Social Security) payments. Once we claim at 70 we will be receiving 84k per year which right now is enough to cover all of our living expenses. Then our retirement assets will all be fun money. Also by using my parents money to fund retirement until those funds run out will allow me to close out accounts at three different fund companies. All of our funds will then be at Vanguard which will be easier for our executor.
Believe me when I say that those who propose condensing your funds into one company are right. I have been dealing with three fund companies and traditional and Roth accounts which can be difficult keep straight. Don’t get me wrong it’s a nice problem to have but difficult to get my head around.