As you may know, Your Survival Guy has a history of spec ops and RMDs at Fidelity Investments. And this time of year was always a scramble to meet the end-of-year deadline for distributions. Falling on the wrong side of December 31 meant getting to know the IRS through letters. Not much fun.
You may also have read that your government is working overtime to change the distribution age next year from 72 to 73 (and down the road a bit to 75). Don’t stress. This is about moving the deck chairs on the Titanic. The IRS will use the life expectancy divisor to up the distribution amounts when they’re taken. An iceberg if I’ve ever seen one.
What this new change will require is an all-hands-on-deck approach to your cash management. In other words, a little creativity. Do you gift a portion of your RMD to charity, take a portion in-kind, or transfer the after-tax portion to your brokerage account and invest it? Your tax bracket will play a big role in your decisions.
Action Line: There are few certainties in this world outside of death and taxes. Let’s focus on keeping more of what’s yours. Keep it in the family. Stick with me.
E.J. Smith - Your Survival Guy
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