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401K mandatory withdrawal, what to do with money?
Posted on 1/4/18 at 9:36 am
Posted on 1/4/18 at 9:36 am
bayou choupique Sr has reached the age of 70. He is aware at 70.5 he has to begin withdrawing money out of his 401k. From what i understand he doesn't need to money or have anything planned to spend it on in the immediate future. Whey options does he have to do with the money? Can he put it back into a roth, play with stocks, etc? Any decent money market accounts to look into? Suggestions please money board.
5
Posted on 1/4/18 at 9:37 am to bayou choupique
Do you even crypto bruh?
Posted on 1/4/18 at 9:49 am to Tigersaint09
Damn what a nice problem to have
Posted on 1/4/18 at 10:05 am to Tigersaint09
quote:no way he would figure that out. he does buy gold and silver coins from time to time.
Do you even crypto bruh?
Posted on 1/4/18 at 10:32 am to bayou choupique
We talking $1200 a month or $20,500 a month.
Posted on 1/4/18 at 10:37 am to YoungManOldMan
quote:
We talking $1200 a month or $20,500 a month.
i'm not sure of his balance. He worked in the oil field for 8 years or so and this is from his old company. He was a teacher the rest of the time and receives a pension from teacher's retirement. I'm going to assume its on the lower end of the spectrum, but it has not been touched from 1985.
Posted on 1/4/18 at 10:47 am to bayou choupique
If he had just $10,000.00 in it, after 32 years it's likely he has somewhere between $85,000-$150,000 depending what the average return was.
Posted on 1/4/18 at 10:49 am to bayou choupique
quote:
Suggestions please money board.
If he already makes charitable donations. Have him do it as a direct transfer from the RMD (required minimum distribution) to the charity.
Alternatively, convert the RMD's, or some of the 401k, into a donor advised fund.
Posted on 1/4/18 at 10:54 am to Golfer
Tell him to gift it to his favorite son.
Posted on 1/4/18 at 11:31 am to bayou choupique
If he doesn't need the money and is comfortable investing it he could do it in a Roth. That way any gains aren't taxable, and he can pull out the contribution if he ever needs to.
Posted on 1/4/18 at 11:43 am to foshizzle
quote:
If he doesn't need the money and is comfortable investing it he could do it in a Roth. That way any gains aren't taxable, and he can pull out the contribution if he ever needs to.
that is what i was thinking but was unsure if you could do that, thanks!
Posted on 1/4/18 at 12:21 pm to foshizzle
Wouldn't he have to have earned income to be able to contribute to a roth? I don't think distributions are considered earned income.
Posted on 1/4/18 at 12:32 pm to bayou choupique
quote:
Whey options does he have to do with the money?
pay someone $50 to set up a binance account for you
invest all into crypto
double your money
cash out
Posted on 1/4/18 at 12:33 pm to rocket31
quote:
double your money
cash out
Wouldn't that just double his problem?
Posted on 1/4/18 at 12:38 pm to Janky
quote:
I don't think distributions are considered earned income.
They sure as hell tax traditional 401k distributions as regular income.
This post was edited on 1/4/18 at 12:39 pm
Posted on 1/4/18 at 12:40 pm to TigerstuckinMS
quote:
They sure as hell tax traditional 401k distributions as regular income.
Yes, they do. Social Security does not consider distributions as earned income.
Posted on 1/4/18 at 12:45 pm to bayou choupique
You have to withdraw a certain percentage as taxable income, just like any other income. There's no way to save on taxes that I know of, I can't imagine there would be otherwise it would make no sense to force people to withdraw.
But just like any other taxable income, he could place it in a Roth or another investment account, savings, etc.
But just like any other taxable income, he could place it in a Roth or another investment account, savings, etc.
Posted on 1/4/18 at 12:51 pm to baldona
Dunno
quote:
IRS rules prohibit putting your RMD into another tax-advantaged retirement account. But you can convert the remaining portion of your traditional IRA assets to a Roth IRA, though it will mean paying more taxes. “You just have to satisfy the RMD requirement before you do a Roth conversion,” says Mingone. (If you aren’t working and receiving earned income, you can’t make a contribution to a Roth but once the money is in a traditional IRA, you don’t need to have additional earned income to move the money to a Roth IRA.)
Posted on 1/4/18 at 12:56 pm to baldona
If I die at 70. Does my balance become a tax free inheritance to my kids?
Posted on 1/4/18 at 12:57 pm to YoungManOldMan
No
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