Monthly Planning Update: Required Minimum Distributions (RMDs)

Cheryl Norman

Cheryl Norman

|4 min. read time|
December 10, 2024
December 10, 2024|
4 min. read time

Still considering your Required Minimum Distribution options for 2024? As the end of the year approaches, it’s essential to address your Required Minimum Distribution (RMD) obligations.

If you’re 73 or older, you must take your RMD by December 31, 2024. The SECURE Act of 2020 introduced changes that may affect how you manage these distributions.

Key Considerations: • Inherited IRAs (Pre-2020):​

If you inherited an IRA before 2020, you can stretch Required Minimum Distributions based on your life expectancy, following IRS guidelines.​

• Inherited IRAs (Post-2020):​

For non-spouse beneficiaries that inherited an IRA after 2020, the rules require the entire account to be distributed within 10 years. This change impacts estate planning and potential tax implications for heirs.

Options for Age-Related Required Minimum Distributions: 1. Take the Distribution and Use the Funds:​

You can withdraw the Required Minimum Distribution, pay the necessary taxes, and use the funds for expenses or something enjoyable. Taxes can be withheld to avoid surprises at tax time.​

2. Reinvest in a Non-Qualified Account:​

After withdrawing the distribution and paying taxes, you can reinvest the remaining funds in a non-qualified account. This strategy can help grow your estate and potentially reduce future tax burdens for your heirs.​

3. Qualified Charitable Distribution (QCD):​

You can direct your Required Minimum Distribution to a qualified 501(c)(3) charity, allowing you to avoid paying income tax on the distribution. Many clients use this option to support their favorite charities or replace regular tithes to their church. If you have any questions or need assistance navigating your Required Minimum Distribution options—especially with the new 10-year spend-down rule for non-spouse beneficiaries—please reach out. We’re here to help make your year-end planning as smooth as possible.

About the Author

Cheryl Norman serves as the Principal Financial Advisor at Flagship Capital Advisors, an independent boutique wealth management firm located in Ohio. Her meticulous attention to detail and unwavering commitment to clients’ economic well-being showcase her proficiency in employing a detailed and methodical approach to personal financial planning. Cheryl guides individuals in establishing tailored financial tools for their unique situations, supporting them through life’s pivotal milestones. Conducting thorough assessments and developing strategic plans, she remains dedicated to delivering consistent service and communication. Cheryl’s areas of expertise encompass investment portfolio design, retirement strategies, college education planning, and risk management analysis.

Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Securities offered through Registered Representatives of Cambridge Investment Research, a Broker/Dealer, Member FINRA/SIPC. Cambridge and Flagship Capital Advisors, LLC are not affiliated.