Individuals born in 1960 or later must begin Required Minimum Distributions (RMDs) at age 75 from their traditional retirement accounts. While these withdrawals escalate with age, strategies exist to utilize the funds efficiently if they aren't immediately needed. One option includes contributing RMDs back into a traditional IRAs, contingent upon having sufficient earned income. Alternatively, depositing RMDs into annuities allows unlimited funding and defers taxes until withdrawals, despite potentially lower performance compared to the stock market. Consulting with a financial advisor is recommended to devise a personalized RMD strategy.
If you don't need your RMDs yet, consider contributing them to a traditional retirement account if you have enough earned income.
An annuity allows for unlimited contributions without immediate taxation, providing steady cash flow, although it may not outperform the stock market during bullish periods.
#retirement-planning #required-minimum-distributions #financial-strategy #annuities #tax-optimization
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