8 thoughts on “Forbes post, “Required Minimum Distributions: Is There An Unintended Nudge?”

  1. Regarding the RMD “nudge.” Whether they automate the RMD process so that it’s invisible or leave it up to us to withdraw RMDs ourselves, for many of us that additional IRA income (+ SS + pension + ??) adds up to way more then we need to meet our annual expenses and way more tax liability. At a time when many retirees are still practicing tax avoidance, this new proposal would be beneficial in keeping our tax bracket as low as possible.


  2. I am in total agreement. Administrators of retirement plans should, by default, automate the RMDS for their customers, especially 401k and other plans where the pro-rata rule governs. The law is unequivocal, is it not? Only the Treasury benefits when an RMD is missed.
    In the case of IRAs, however, there should be an opt out mechanism in case the owner of multiple accounts wants to make the RMD from only one account.


    1. Automation eliminates choice. One may want to postpone a
      withdrawal depending on one’s income level from one year to the next. This was true in my circumstances as I was born in July and had the option to postpone my initial withdrawal to the year after I turned 70 1/2. My suggestion is make automation available but optional.


  3. Wouldn’t it make most sense to move the unneeded RMD distribution by converting it into a Roth IRA? Then it would grow tax free.


  4. Sometimes serms the brokerage owning account fo6rs not want to disgorge the money in account. Had this with fidelity. And moved money out


    1. I’m not sure how that would work. For instance, I helped my mother manage hers IRAs; she had a few IRA accounts. The one she pulled RMDs from each year varied. The firms holding her IRAs wouldn’t have known that. (I have IRAs with four different firms, my wife has IRAs with three. The firms have no idea how we plan to withdraw from our IRAs.) The implementation of that would be difficult.


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