Required Minimum Distributions (RMD’s) are familiar to almost anyone with a retirement account. For your own IRA, they begin at age 70 1/2. For an IRA you’ve inherited, they begin right after your loved one’s death. Studies show more RMD’s are taken in the 4th quarter than the first 9 months of the year. Rather than putting it off, try these A-B-C ways to make RMD’s special.
A – Anniversary recognition. Especially if you inherited the IRA, taking the RMD on the anniversary of your loved one’s loss can be a way to remember the special gift they left you.
B – Birthday present for yourself. Whether it’s your own money or inherited, use at least part of the RMD during your birthday month to do or buy something special only for you.
C – Charitable donation. If you aren’t able to itemize deductions, either because you don’t have enough deductions or are phased out of them, sending part of your RMD direct to a qualified charity allows you to avoid the taxable income. This can be financially valuable as a way to get a deduction you otherwise would not, but also emotionally valuable to see the impact of your gift.
Some people even combine two of the three and give a charitable donation as a birthday present to themselves, or in memory of their loved one.
Whether you are taking them now or will in the future, be intentional about RMD’s. Rather than feeling like a last-minute task of the year, use the requirement to make some fun or meaningful memories.