| June 9, 2021 | 0 Comments
We have all heard the statement “DON’T TOUCH THE PRINCIPLE”.

If you need to withdraw a Required Minimum Distribution (RDM) and the entire amount is not needed at the present time, my suggestion is to transfer the funds AFTER tax to another investment account.

When transferring instead of withdrawing the ENTIRE distribution you can save on CAPITAL GAINS and brokerage fees. This works best when transferring accounts at the same brokerage house. You are withdrawing the Required Minimum Distribution from your retirement account, paying the required taxes and still preserving SOME of the principle.

If you are in a position to transfer the entire amount. This can be accomplished by paying the taxes via estimated taxes during the year so that you are not penalized at tax time.

This approach does not save on the taxes to be paid on the minimum distribution but it does on capital gains and brokerage fees with the added feature of preserving some of your investment.

If you do not have a regular investment account with the the brokerage firm that your retirement is with, I’m sure they would be happy to open one for you.

I am always interested in preserving my client’s valuable funds.
Filed Under: financial planning, taxes

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