FIC Blog

We believe in – and live by – a philosophy of excellence.

Average is not good enough … Our goal at Family Investment Center is excellence. We find excellent investment products and supervise an excellent service package. We maintain a library of excellent research materials and financial planning resources. We also demand top safety and security for our clients.

We won’t settle for average. We continually seek top managers or securities and meld them into superior custom portfolios. Each palette of investments is carefully tailored to personal or family goals. We enlist excellent managers, research, resources, and effort for our clients. Don’t settle for average. You deserve excellence.

Please search our blog posts for answers to common investment questions, and we look forward to sharing our knowledge and experience with you first-hand.

6 Important Questions to Answer When Planning for Retirement

Planning for Retirement Starts by Talking About These Key Questions

 

 

We all think about that day when we’ll finally retire, but some of us are more prepared than others. It’s true, you can overthink retirement –  but for most of us, planning for retirement involves careful consideration of many factors.

Whether you began thinking of these questions years ago, or haven’t thought of them for years, each is vital in planning for retirement:

1. When Should I Take Distributions?

All qualified retirement plans have specific requirements regarding when you need to take your distributions. For example, some plans allow you to keep your benefits after you’ve retired or have been terminated from your job. If your plan expenses are low and you have other income options, allowing these funds to continue to grow could be a good idea.

2. How Are Distributions Taxed?

If you’re withdrawing early (before you turn 59.5 years old), there will be a 10% tax penalty assessed, in addition to any federal and state income tax that’s due. Some plans allow exceptions, so be sure to check with your plan administrator or advisor.


3. Can I Rollover My Distributions?

If you’re getting a large distribution via a pension or profit-sharing plan, federal law allows you to roll it to an individual retirement account (IRA). Instead of just putting this money in your bank account and getting taxed, you are “sheltered” from the tax while it’s in your IRA account. Then, when you begin taking distributions, that money is subject to income taxes.

4. What About Tax-Free Options?

While all money will be taxed, some prefer to be taxed up front, which is possible with a Roth IRA or Roth 401(k). When utilizing a Roth, you don’t get the tax break up front, but the Roth does allow for tax-deferred growth and tax-free withdrawals in retirement.

5. What About Investment Limitations?

Fortunately, when investing with an IRA, you have few limitations. You can invest in CDs, stocks, bonds, mutual funds or money market funds. However, talk to your investment advisor and make sure you have the options you need to best fit your strategy.

6. Do I Need an Advisor?

You’re not required to have an advisor assist you in planning for retirement or in managing your investments. However, paying modest fees can provide huge benefits on your investment in an advisor.

Perhaps just as valuable (if not more) is the peace of mind and confidence you can experience from not trying to D-I-Y important and life-changing investment decisions. Let’s put it this way … you wouldn’t try to fix a major plumbing problem yourself. You would hire an expert because you want the task at hand managed as effectively and efficiently as possible. And it will free up time for you to do things you enjoy. It’s similar when you hire a professional advisor (especially when you work with one who operates within a commission-free, client-focused setting).

To talk about these questions and others in a jargon-free environment, contact Family Investment Center today. Let’s sit down and determine what your kind of retirement freedom looks like and how you’ll get there.

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Planning for Retirement: Decades and Differences

A Brief Summary of the Changing Seasons of Planning for Retirement

 

Planning for retirement looks different for everyone, and those differences widen when you consider the various decades of life. Here is a look at how retirement planning changes during different seasons of your life:

The Roaring 20s

It’s important to get started with your investments early, and compound growth is something that should entice the interest of a 20-something. Compound growth is the gain on top of your previous gains. These snowball over the years and work to your advantage.

The 401(k) is the most common investment vehicle, but you can also consider IRAs. Talk to your investment advisor to put together a plan that is the right fit for you.

30-Somethings: Here’s to You

Many investment strategies focus on buckling down when you’re in your 30s, putting away as much as possible while you’re freeing yourself of debt you might have accrued from college or from “learning the ropes” about credit in your 20s.

Some 30-somethings are heavily invested in stocks. This gives them the chance to maximize their savings. Even if the market is volatile, stocks may be a viable option, because in the long run, the ebb and flow of the market can eventually pay off.

For the 40s …

Did your salary increase while you were in your 40s? There’s a good chance your spending followed suit. It’s vital that while in your 40s, you’re not building up bad debt, which means staying disciplined and on budget is a must.

It’s in the 40s that many will begin saving for their children, and/or setting aside money for renovations to a home and other projects. However, it’s important not to borrow against your retirement savings for any kind of project. In fact, it’s in your 40s that you may begin in earnest to make bigger contributions to your retirement funds.

Hitting 50. Now What?

If you’ve taken a closer look at what you’ve saved and begun to panic that you’ll never have enough to retire at age 65, you can increase your savings rates even higher now, as once you hit age 50, many retirement accounts allow a special “catch-up” contribution.

 

You may consider talking with your advisor more often as you approach retirement to ensure that your investments are properly aligned with your retirement needs and goals.

 

Arriving at Retirement … Or Not Yet.

Hitting 60 makes retirement feel like a reality, finally. Now is the time to make final adjustments with a more accurate look at your current finances and how what your lifestyle will resemble once you aren’t working.

However, many workers choose to continue working longer, realizing they may live several years longer than originally planned. Or they choose to semi-retire, leaving a full-time position for a flexible or part-time one.

This is an important time to talk in detail with your advisor about stocks (how many to keep, what the ratio might be, etc.). Also, talk to your investment advisor about how you’ll handle your Social Security filing, because there are ways to maximize that source of income. It’s not a “signand done” kind of benefit. In fact, you may be surprised to learn of different options and the outcomes for each of your decisions related to Social Security.

At Family Investment Center, we’ve assisted clients in every stage of life with planning for retirement and the life changes that happen along that journey. Contact us today and let’s talk about what matters most to you.

 

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Investing for Retirement: Steps Millennials (Or Anyone) Can Take Now

 

Today is the Right Time to Start Investing for Retirement

b2ap3_thumbnail_Retirement-10.jpgThe Millennial generation includes people who are just starting their careers – and many times, the last thing they’re thinking about is ending that career and stepping into retirement. But investing for retirement at an early age has many advantages. If you are a part of the Millennial generation (or if you’re not, but you’d like to eventually retire) here are a few tips to consider:

There is no such thing as investing too early. Your money works for itself when it grows through strategic investing, and the dollars you invest in your early 20s can multiply many times by the time you retire. When you start young, small but consistent savings can grow into several thousand dollars in potential retirement income as your investments grow over time.

Get involved in your company’s 401(k). Most companies will offer a matching amount, so make sure you’re contributing at least what your employer will match, if you can. Not trying to do this means leaving money on the table … and realizing more freedom to see your dreams become a reality when you take that last step out of your company and that first step into your retirement.

Plan for emergencies, but don’t over plan. There might be a time in your life where you’ll need access to money to get you through a three- to six-month emergency period. Whether it’s a health-related issue, relationship issue, or switching jobs or careers, you’ll need to have an emergency savings account to help cover your expenses. Beyond that, choose to invest your money rather than placing it all into savings. Investments, when made consistently and with expert guidance, have a much stronger potential for growth than a mere savings account.

Need a guideline to aim for? Invest 10 to 20 percent of each paycheck. It might sound like a lot of money, but this is a solid, strong, and likely quite productive goal as you save for retirement. Have this money taken automatically from your paycheck first before you budget your spending. (Think of it as your “freedom fund.” Or whatever it takes to remind yourself that this is going to mean having a lot of fun later in life).

Choose a trusted investment advisor to help you. When you talk to your prospective advisor, ask them for their credentials, the services they offer, how they’re paid, their philosophy, and their approach on investing. Make sure they’re willing to communicate openly and as often as you’d like. Look for someone who is commission-free so you know they’re motivated by your best interests.

You can manage student loan debt while making investments. Student loan debt reached one trillion dollars last year. This kind of debt can lead to delays in major life events for graduates, like buying a house, getting married and starting a family. However, it shouldn’t be a reason for not investing for retirement. Smart budgeting can keep you current on your student loan payments while you simultaneously put money away for retirement.

A little risk is not a bad thing. Media reports suggest that many millennials are known for conservative financial habits, but risk can be a positive element in investing, as risk is typically correlated with an appropriate reward.  Bonds and savings accounts have low rates of return, while the stock market can have a higher return in the long term if you are willing to tolerate volatility and maintain consistency over time.

Place your emotions on the back burner. You must be active in managing your assets, but that doesn’t mean reacting with emotion to what’s going on. Rather, you’re regularly monitoring your portfolio as you age. A typical scenario is for the portfolio to have more aggressive investments when you’re young and have many years of employment left, then taper off to a more conservative portfolio as you age. Consulting with your investment advisor on a regular basis is recommended to keep your emotions and attitudes toward money from becoming an obstacle to your success.

When you choose to plan your dreams with the help of Family Investment Centeradvisors, you’ll obtain valuable, unbiased information for your investment plans. Contact us today and find out how our approach to investing is different than others.  

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2,700 Rules: Planning Your Retirement and Social Security

 

b2ap3_thumbnail_Money-Management-1.jpgAt first glance, Social Security may seem simple. You work for decades while paying into the Social Security fund, and you’re eligible to start getting some of it back when you hit 62. However, did you know there are more than 2,700 rules that loom over the federal government’s program? If your answer is “no,” planning your retirement may now seem a little more complicated.

You can be a prudent saver and investor, yet you can still make mistakes with Social Security that can cost you thousands of dollars. Everyone’s situation calls for a different take on how a smart strategy should appear. What makes sense for a retired widow or widower could be the wrong option for a retired married couple.

The following is a list of topics that are most commonly missed when planning your retirement:

·         1. Consider waiting before drawing your Social Security benefits. In many cases, if you wait until you’re 70, your payment could reach a level that’s up to 76 percent more than someone who withdraws benefits at age 62. The difference is in delayed retirement credits, which increase by eight percent plus inflation for every year you wait after your full retirement age.

·        2.  If you have the option to file two types of benefits, it is usually best not to do both at the same time. For instance, if you’re eligible for survivor benefits as well as your retirement benefits, investment experts recommend that when planning your retirement, take the smaller one first, and the larger one later.

·         3. Some retirees don’t realize they are eligible for getting a spousal or a survivor benefit and lose out on thousands of dollars. Spousal benefits for married couples are worth half the benefit of the partner’s retirement benefit. Even if you’re divorced, you could be eligible for that spousal benefit. Survivor benefits can be worth as much as 100 percent of the deceased spouse’s full retirement benefit, so it pays to stay on top of your eligibility.

·        4.  Planning your retirement includes knowing when to file. There are many opportunities and choices for filing. For example, you may not know in order for your spouse to get benefits, you may have to file for your retirement benefit first.

·        Just because you’re divorced doesn’t mean you and your former spouse get excluded from spousal benefits, but you have to have been married for at least 10 years.

Find more helpful tips about planning your retirement at Family Investment Center. Our team of professional investment advisors is ready to help guide you concerning any number of complex investment decisions, and we will provide that guidance in a way that is easy to understand. In fact, we can offer Social Security maximization tools and  unbiased, direct conversation with our experienced team. Contact us today and let’s get started exploring Social Security maximization as one piece of your retirement strategy.

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Investing for Retirement: Are You Avoiding These Common Misperceptions?

 

Troubling Statistics Circulate Regarding Investing for Retirement

b2ap3_thumbnail_Retirement-8.jpgAmerican workers are falling short on their retirement investments, according to the Employee Benefit Research Institute.Why? Investing for retirement can be intimidating, so it’s a task that is often ignored or delayed to such a degree that it becomes challenging to gain the financial independence that most adults hope for by the time their career has ended. Some believe they’ll have time later in their working years to accumulate a retirement fund; others invest in children’s college or pay off a mortgage early, rather than allotting as much as possible each month toward a retirement plan.

The greatest resource a worker has is time, because in many cases, investments left to grow will generate stronger returns as the years pass. Unfortunately, too many workers procrastinate for a variety of reasons. For some, it’s the crushing student loan debt they are working to pay down. Some workers have a belief that they simply don’t have extra money for investments, or that investing is too complicated. Others believe that their current allotment toward investments will be enough, not realizing that many Americans actually live ten to 15 years longer than they anticipate. What do recent studies say about Americans’ retirement behavior?

Troubling Statistics: American Workers Have Only a Fraction Saved
Nearly 30 percent of American workers have less than $1,000 in their retirement accounts. This includes everyone from people entering their careers to workers who have a few decades of employment. The statistics, however, improve for 50-year-olds. According to the U.S. Census Bureau, the average savings is nearly $43,000 – but this is only a fraction of what most adults will need to live on following retirement. In total, Boston College’s Center for Retirement Research estimates that in the U.S., there is currently a $6.6 trillion shortfall in retirement savings.

Delaying Retirement Due to Debt
Debt isn’t something most retirees look forward to, nor want to carry with them into a new season of life. However, debt is a growing reality for the U.S. retiree population. A study from CESI Debt Solutions found that nearly 56 percent of retirees in America are burdened by debt. Furthermore, since 1991, the number of bankruptcies for this segment of the population has risen by 178 percent.

Many Retirees are Worried or Concerned (Rather than Excited)
Americans for Secure Retirement found in its survey that nearly 90 percent of Americans are “worried” about retirement. Their main concern is having a comfortable standard of living. In fact, the percentage of those saying they experience worry toward retirement has increased by around 15 percentage points since 2010. Some level of concern toward retirement is normal, but what can you do to keep the worry from taking over your joy at having reached this milestone?

Connecting with a Professional Advisor
Investing for retirement can be marked with confusion and over-analysis, but if you’re working with a professional investment advisor, it can be a rewarding, exciting process that leaves you feeling confident about your future. Professional advisors can help you understand the investment process and show you options that have the potential for higher returns than what you’ll find in a traditional savings account. They also know the details toward tax considerations and Social Security maximization, taking the guesswork out of investing on your own.

Family Investment Center is commission-free, which means our clients receive objective advice without any conflicts of interest. No matter where you are in your career, we have strategies that can offer you more confidence (and less worry) as you approach retirement.

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Planning for Retirement: Can You Afford to Wait Any Longer?

6 Tips to Follow When Planning for Retirement

b2ap3_thumbnail_Retirement-Planning-3.jpgHere’s a startling statistic: According to the Employee Benefit Research Institute, one-third of Americans between the ages of 35 and 44 have less than $1,000 saved for their retirement. If you feel challenged or overwhelmed with planning for retirement, it’s time to implement a few steps in the plans for your future.

1.      Save for You First
Before you can help your family, you must first help yourself. Many investment professionals suggest that you think about your retirement in more detail than planning for your children’s college education. Why? In simple terms, the costs for your children to care for you in retirement and your post retirement years can far outweigh the costs they’ll see for their college education.

2.      Increase Your Savings Toward Retirement. (Sounds simple, but many fail
Many investment advisors will recommend socking away 15 percent of your income every year to a retirement account. However, for individuals who have waited until later in life to begin planning for retirement that number may be much higher. Consider incrementally increasing the amount until you reach 20 percent.

3.      Max Out the Contributions to Your 401(k) and IRAs.
This year, if you are 50 or older, you can contribute $6,500 to your IRA. If you’re younger than 50, the maximum amount is $5,500. The amount is subject to change every year, so keep an eye on it. Furthermore, if you receive bonuses, raises, gifts, etc., it is good to put these toward your investments.

4.      Consider Delaying Social Security Benefits.
Maybe you’ve got your mind set on retiring at 65, but you could consider putting in a couple more years at work to assist your planning for retirement goals. Another thing to consider is to delay drawing your Social Security. If you can wait until you’re 70 to begin drawing down your benefits, you may receive monthly payments that are up to 75 percent higher than if you start taking them at age 62.

5.      Don’t be Afraid to Plan for Your Future at Any Age.
It can be intimidating to turn 40 or 50 and take the plunge into planning for retirement. However, considering you still have a couple of decades to build a portfolio, sit down with an investment advisor and get some advice about how to allocate your investments.

6.      Work With a Fee-Only Advisor.
A fee-only advisor is one that will not take commissions on products; instead, their ultimate objective is to help you meet your goals and acting in your best interest.  (A more client-first philosophy).

Family Investment Center is a team of fee-only investment advisors who assist individuals and families as they plan for retirement or when other life situations arise. We keep our clients’ interests at the center of our focus, and we never take a commission. We will walk you through the complex investment processes. Come in and talk to us today.

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Planning for Retirement: Where do You Land in the Stats?

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b2ap3_thumbnail_Retirement-Planning-1.jpgPension plans are largely a thing of the past, which means many workers who want a chance at a good retirement are putting money away in 401(k) accounts. Surprisingly, only 53 percent of Americans in the civilian workforce are actually doing that, according to the U.S. Bureau of Labor Statistics.

The statistics for private industry workers are worse – 48 percent are contributing regularly to a 401(k). On the upside, around 81 percent of state and local government workers are participating. The subset that suffers the most when it comes to participating in a tax-deferred account is the part-time worker and the low-income worker who don’t have an employer offering a 401(k). Financial planning for these individuals is often especially lacking.

As more Americans leave the corporate world where employer contributions in 401(k) plans are common, workers are juggling multiple jobs and not setting any money aside for retirement. By choosing an entrepreneurial path, these individuals are finding more satisfaction in their careers, but at the expense of a smart financial planning strategy.

For people engaged in financial planning for retirement, most are clued in to what they should be spending on non-essentials and what they need to be investing each paycheck. Unfortunately, the people who need to save the most could be making the biggest blunders: one statistic from the
Institute for American Values says that people earning less than $13,000 a year spend about three percent of their income on lottery tickets. If that money was put toward investments, it could add up to $87,000 over 40 years if it earned 7.2 percent per year in an investment fund.

The problem may be rooted in the classic difficulty that many Americans have toward foregoing some expenditures now, getting the big things right, and thinking now toward the
golden years of retirement. Even people who are already investing in their future are often baffled to learn they could be doing much more, and the actual number of investment options out there – pointing again to the need for professional investment management.

Investment advisors have the knowledge and experience that can help your money work for itself and take the stress of these decisions off your mind. The closer you get to retirement, the more impactful your decisions will be. Bringing in a professional to guide you along can make the path toward the retirement lifestyle you want that much clearer. 

Retirement planning isn’t easy to do on your own, which is why the professionals at Family Investment Center continue to maintain high credentials and industry knowledge.  Our team can sit down with you to talk about all the scenarios that could be in your future, in language that makes sense. We’re also commission-free, which means you get an objective opinion about where you should consider putting your money. Come see why we’ve earned the trust of so many families as they plan for retirement.

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How to Plan for Retirement: 5 Quick Tips to Help You Set Your Goals

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You’ve come to the conclusion that retirement is indeed a reality. As a youth, you always thought of retirement as a distant event that was too far removed to take seriously. You’re probably starting to ask more questions about how to plan for retirement, so here are some tips to take into account. 

1. How Much are Your Socking Away?
Most investors could put more into their retirement accounts but don’t. You’re missing out on free money if you aren’t contributing the maximum amount that your employer is willing to match. Don’t get too crafty, either; if you think you’re smart by frontloading your contributions at the beginning of the year, think again, because you're missing out on the employer match. Don’t get caught up in the formulas and all the talk; concentrate on what your employer contributes and how so that you can maximize this benefit.


2. Calculate How Much You’ll Need in Retirement
This is where many investors falter because they don’t think they can accurately determine what they’ll need 20 years or less from now and how
Social Security will play into that. Take advantage of some retirement income tools, such as retirement calculators, that help you get a handle on exactly how much you’ll need when you decide to start pulling down your Social Security benefits. Keep in mind that the average life expectancy is longer than it once was, and women typically live longer than men, which is another aspect of retirement planning that people often forget. Many professional advisors offer a Social Security maximization service, so ask for it when you make an appointment.

3. Should You Get Taxed Now or Later?
This is a question that can go either way depending on your tax situation. For people who think their tax rate will be lower in retirement than it is now, the choice may be the traditional route of taking taxes out during retirement. For people who think their tax rate will be lower now than in retirement, they generally go with a tool like the Roth IRA.

4. Do You Need to Play Catch-Up?
You can put a maximum of $17,500 in your 401(k) per year as of 2014. Many Americans are finding themselves in the position where they didn’t put anything close to that in their account every year, and now that they are 50 or older, they fear they’ll never be able to retire. Fortunately, those 50 or older are allowed to bulk up their 401(k) by adding an additional $5,500 a year and another $1,000 in their IRA this year. In 2015, the maximum contribution to a 401(k) is $18,000 with a catch-up contribution of $6,000. Do some budgeting and start putting more in those accounts now so you can have a comfortable retirement.

5. See an Investment Advisor
Knowing how to plan for retirement is something few novices can do on their own effectively. Your best bet is to invest in professional advice with an advisor who knows how you can put your money to work for you. You can’t be expected to know about all the tax laws, contribution limits, and the minutiae that make a difference. At
Family Investment Center, we’ll walk you through the process so that you can enjoy a little of the freedom that comes with working with a professional advisor.

 

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Want the Good Life? Know the Answers for Planning Your Retirement

b2ap3_thumbnail_Retirement-5.jpgA surprising number of Americans do next to nothing to prepare for retirement. For those that do make efforts to put their money to work in investments for retirement, the process often causes confusion. According to Money Magazine, planning your retirement isn’t getting any easier – and most adults don’t have a full set of answers.

Decades ago, it was common for a worker to retire on the pension plan at their place of employment. These plans have fallen out of favor with a majority of American businesses, which means that you are having to do a lot more work on planning your retirement than the generation of workers before you.

As noted in Money Magazine, with 64 percent of households within five years of retirement, it’s more important now than ever that Americans find the answers to their questions. A financial research firm, Hearts and Wallets, did a study recently that found the percentage of households so close to retirement has jumped by 10 points in just two years. Furthermore, the research indicates that Americans believe retirement planning is the most difficult among 24 other financial tasks.

What’s the biggest obstacle to understanding retirement? For many people it’s knowing when exactly they will retire. The Hearts and Wallets study found that 61 percent of those surveyed said they didn’t know when they would retire. For nearly everybody else, planning for retirement is difficult due to not knowing how long a lifespan will be after retirement.

Another area that confuses Americans, and understandably so, is figuring out the minimum distributions from retirement accounts, deciding where to invest, and when to start investing. These are aspects of planning your retirement that could use the help of a professional investment advisor.

Hearts and Wallets didn’t touch on the mortality aspect of planning for retirement. However, due to the advancements in medical technology and ingenuity, we’re living longer. In 1950, women could expect to see age 71 whereas men were looking at 65 as their average life expectancy. Today, women can expect to live to age 81 and men to age 76. These are things to take into account for retirement that your parents or grandparents didn’t probably consider as heavily.

One of the tools you can use in your retirement planning is Social Security. While this isn’t likely going to be the bulk of your income for your retirement years, if approached correctly, you can have thousands more dollars in Social Security benefits coming to you over your lifetime.


To get the answers to your Social Security questions and to clear up confusion about your retirement planning, come to Family Investment Center where professional and experienced advisors are ready to guide you through the process. (Plus, we don’t operate on commission – instead we’re motivated by you reaching your goals!)

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How Much Do You Know About RMDs?

  1. What does RMD stand for?
  2. What is an RMD?
  3. If you are the original owner of your eligible retirement account, generally at what age do you have to start taking RMD withdrawals?
  4. Which widely-used type of retirement account DOES NOT have an RMD?
  5. When taking your RMD, what is the maximum amount you can withdraw?
  6. Will your RMD withdrawals be included in your taxable income?
  7. What is the benefit of making a contribution of all or part of your RMD withdrawal to charity?
  8. What are the consequences for taking an RMD amount that is not high enough?
  9. What are the consequences for taking an RMD late?
  10. Fred will hit his RMD age within the first half of the year (January-June) of 2015.  By what date will Fred need to take his first RMD
  11. Susan took her first RMD for 2013 on February 1, 2014. By what date will Susan need to take her second RMD?
  12. John will be taking his 10th RMD this year. By what date will he need to take this RMD?
  13. If your spouse is the beneficiary to your eligible retirement account, what two requirements must be met in order for your RMD amount to be lower?
  14. If you are not the original owner of your IRA (such as Inherited IRAs), at what age do you have to start taking RMD withdrawals?

Answers:

  1. What does RMD stand for? Required Minimum Distribution.
  2. What is an RMD? The minimum amount you must withdraw from your eligible retirement account each year.
  3. If you are the original owner of your eligible retirement account, generally at what age do you have to start taking RMD withdrawals? When you reach age 70½.
  4. Which widely-used type of retirement account DOES NOT have an RMD? Roth IRA.
  5. When taking your RMD, what is the maximum amount you can withdraw? You can withdraw any amount within your account, as long as you have reached the minimum required.
  6. Will your RMD withdrawals be included in your taxable income? Yes, except for any part that was taxed before your basis.
  7. What is the benefit of making a contribution of all or part of your RMD withdrawal to charity? The withdrawal may not count toward taxable income.
  8. What are the consequences for taking an RMD amount that is not high enough? You may have to pay a 50% excise tax on the amount not distributed as required.
  9. What are the consequences for taking an RMD late? You may have to pay a 50% excise tax on the amount not distributed as required.
  10. Fred will hit his RMD age within the first half of the year (January-June) of 2015.  By what date will Fred need to take his first RMD? April 1, 2016.
  11. Susan took her first RMD for 2013 on February 1, 2014. By what date will Susan need to take her second RMD? December 31, 2014.
  12. John will be taking his 10th RMD this year. By what date will he need to take this RMD? December 31, 2014.
  13. If your spouse is the beneficiary to your eligible retirement account, what two requirements must be met in order for your RMD amount to be lower? Your spouse must be 1) the sole beneficiary, and 2) younger than you by 10 years or more.
  14. If you are not the original owner of your IRA (such as Inherited IRAs), at what age do you have to start taking RMD withdrawals? Trick question! This depends on a variety of factors, which can be found at www.irs.gov

 

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