becoming 70,dec,2007 i have 2 choices re rmd’s
i dont know what to do, i am still working and i am single woman . i earn about 62k including social security of about 1k per month, and have a rool over ira in fidelty that waas 27k last year and is now half and also about 96k in vanguard ira’s i dont have to touch my 401k at work as i am still working and probably will have to do so for a few more years. should i take my mrds for this year in dec.08, or wait till end of march 2009 and then a will need a 2nd mrd in dec 2009, please advise me
Permalink Submitted by Alan Spross on Sat, 2008-11-29 22:05
First of all, stay tuned to any RMD relief that may be adopted prior to year end. I do not think there will be relief for 2008, but there is a good chance there will be for 2009. It is impossible to determine if any 2009 relief will include 2008 RMDs deferred to the required beginning date in 2009. Since you do not need the money, and your RMD for each year will be in the general area of 4,000, it may be worth the gamble to plan on deferring the 2008 RMD. If you get double relief, it could result in avoiding both RMDs, but if 2009 is the only RMD that is waived, you will only have to take the deferred 2008 RMD prior to April 1st.
On the other hand, if there is no relief passed and you would have to take out around 8,000 next year, you have the whole year to possibly increase your 401k deferrals to offset the added RMD income.
The above is a plan if you do not expect your tax bracket to change. One thing you do know is that your SS income will be up by 5.8% in 2009 over 2008. If there are other factors that you think will put you into a higher bracket in 2009, then you should take your 2008 RMD around the middle of December unless you hear that there will definitely by RMD relief for 2008.