Ask Terry Questions Mandatory IRA Distribution at 70 1/2

Mandatory IRA Distribution at 70 1/2

By Terry Savage on April 06, 2014 | Financial Planning / Retirement

My husband will be required to take a mandatory IRA distribution before the April he turns 70 1/2, which will be next
year. As we are both retired, living comfortably, NOT rich, just comfortable, what do you suggest we do with the distribution. We currently PAY Federal taxes each year, and hate to pay more with this distribution. Our home is paid off, we have no deductions, thus no way to lower our tax bill. Thanks Terry.

Terry Says:  Congratulations!  Everyone who reads my blog wants to know how you did it!  And everyone wants to be in your place — getting “extra” money in retirement.  Now, there’s no law that says you must “spend” this distribution.  You might want to put some in savings, and some in other investments.  But first, you must pay the taxes on the distribution every year, so be sure to set some money aside. The government wants to get its share!  (And now that you’re building up all these assets, but sure your will/estate plan is up to date, and that you have named the proper beneficiary on your IRAs.)

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