72T RMD
When doing a 72T and using the RMD, is the amount after calculation the minimum to withdraw or is that the amount to withdraw. example:
Required minimum distribution method
Uniform lifetime table
$13,440
Single life table
$19,059
If using the Uniform lifetime table $13,440 would be the minimum but I could take more and if using the Single life table $19,059 would be the minimum but I could take more.
Thank you
Permalink Submitted by Alan - IRA critic on Thu, 2021-09-02 18:57
The RMD method is the worst method to choose because it generates lower distributions than the other two methods, you have to recalculate the distribution every year, and you lose the benefit of the one time option to reduce distributions by changing to the RMD method from one of the higher fixed distribution methods. Nonetheless, the RMD method is not a minimum, it is the exact amount you have to withdraw with each year’s calculation. You cannot take out more than what the calculation generates, and you cannot take out less.
With the fixed amortization method, you will need a much lower account balance to generate the same distribution as the RMD method. That allows you partition your IRA into two accounts, one for the 72t plan and the other outside the plan that could be used for emergency needs without busting the plan. This is like having insurance against busting the plan if you need more money than your 72t distribution.