Mandatory minimum withdrawals: cumulative or year-by-year?


A

AES/newspost

Let's say that the mandatory minimum withdrawals from my
tax-deferred TIAA-CREF retirement savings (currently age 72)
will be, in round numbers, $50K this year and again next
year. For cash flow reasons, however, I'd like to withdraw
$70K this year. Can I then only withdraw $30K next year?

In more general terms, is the IRS requirement only to meet
some cumulative withdrawal target by the end of each year?
(As might seem a reasonable policy objective, with the
cumulative target of course increasing each year considering
all previous withdrawals, recent deposits, and growth in
value)

Or, perhaps in the interest of simplification, is the
requirement simply stated as a year by year mandatory
withdrawal, based only on current savings at the start of
the year and actualial considerations for the retiree? (As
I expect is the case.)
 
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A

A.G. Kalman

ES/newspost said:
Let's say that the mandatory minimum withdrawals from my
tax-deferred TIAA-CREF retirement savings (currently age 72)
will be, in round numbers, $50K this year and again next
year. For cash flow reasons, however, I'd like to withdraw
$70K this year. Can I then only withdraw $30K next year?
If you only withdraw $30K yo would be subject to the excess
accumulation penalty.
In more general terms, is the IRS requirement only to meet
some cumulative withdrawal target by the end of each year?
(As might seem a reasonable policy objective, with the
cumulative target of course increasing each year considering
all previous withdrawals, recent deposits, and growth in
value)

Or, perhaps in the interest of simplification, is the
requirement simply stated as a year by year mandatory
withdrawal, based only on current savings at the start of
the year and actualial considerations for the retiree? (As
I expect is the case.)
Yes. It is prior year-end balance divided by life
expectancy factor from the apprpriate table.

Alan
http://taxtopics.net
 
A

Arthur L. Rubin

AES/newspost said:
Let's say that the mandatory minimum withdrawals from my
tax-deferred TIAA-CREF retirement savings (currently age 72)
will be, in round numbers, $50K this year and again next
year. For cash flow reasons, however, I'd like to withdraw
$70K this year. Can I then only withdraw $30K next year?
No.

Or, perhaps in the interest of simplification, is the
requirement simply stated as a year by year mandatory
withdrawal, based only on current savings at the start of
the year and actualial considerations for the retiree? (As
I expect is the case.)
Yes.
 
B

Barry Picker

AES/newspost said:
Let's say that the mandatory minimum withdrawals from my
tax-deferred TIAA-CREF retirement savings (currently age 72)
will be, in round numbers, $50K this year and again next
year. For cash flow reasons, however, I'd like to withdraw
$70K this year. Can I then only withdraw $30K next year?

In more general terms, is the IRS requirement only to meet
some cumulative withdrawal target by the end of each year?
(As might seem a reasonable policy objective, with the
cumulative target of course increasing each year considering
all previous withdrawals, recent deposits, and growth in
value)

Or, perhaps in the interest of simplification, is the
requirement simply stated as a year by year mandatory
withdrawal, based only on current savings at the start of
the year and actualial considerations for the retiree? (As
I expect is the case.)
The requirement is an annual requirement. If you take more
this year, you still have to take the full minimum next
year. Next year's minimum would most likely be slightly
lower, due to the account balance having been diminished.

Barry Picker, CPA/PFS, CFP
 
A

Arthur Kamlet

AES/newspost said:
Let's say that the mandatory minimum withdrawals from my
tax-deferred TIAA-CREF retirement savings (currently age 72)
will be, in round numbers, $50K this year and again next
year. For cash flow reasons, however, I'd like to withdraw
$70K this year. Can I then only withdraw $30K next year?

In more general terms, is the IRS requirement only to meet
some cumulative withdrawal target by the end of each year?
(As might seem a reasonable policy objective, with the
cumulative target of course increasing each year considering
all previous withdrawals, recent deposits, and growth in
value)

Or, perhaps in the interest of simplification, is the
requirement simply stated as a year by year mandatory
withdrawal, based only on current savings at the start of
the year and actualial considerations for the retiree? (As
I expect is the case.)
Sorry, but it's the minimum for the year, and there's no
carryforward or credit for taking more than the minimum one
year.

If you have to take 50,000 and take 70,000 you get no credit
for the next year.

__
Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH
 
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H

Herb Smith

AES/newspost said:
Let's say that the mandatory minimum withdrawals from my
tax-deferred TIAA-CREF retirement savings (currently age 72)
will be, in round numbers, $50K this year and again next
year. For cash flow reasons, however, I'd like to withdraw
$70K this year. Can I then only withdraw $30K next year?
You can take the $70K this year (you can ALWAYS take more
than the minimum), but you will have to take the RMD next
year. That is based on your account balance, actuarial
factor, etc as described in Pub 590. If that is $50K, then
you cannot take only $30K.
In more general terms, is the IRS requirement only to meet
some cumulative withdrawal target by the end of each year?
(As might seem a reasonable policy objective, with the
cumulative target of course increasing each year considering
all previous withdrawals, recent deposits, and growth in
value)
No, the IRS policy is for you to take the RMD (or more) each
year. There is no cumulative total that you must meet.
Or, perhaps in the interest of simplification, is the
requirement simply stated as a year by year mandatory
withdrawal, based only on current savings at the start of
the year and actualial considerations for the retiree? (As
I expect is the case.)
that's the one.
 
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