Taking Your RMD? Consider Your Options
If you are at least 70½ and own an Individual Retirement Account, you’re probably aware that you must start taking required minimum distributions (RMDs). But, what if you are in the fortunate situation of NOT needing the money for day-to-day expenses? Here are some options for those assets:
Set up a 529 college savings plan. The tax-advantaged growth offered by a 529 college savings plan could provide an attractive option for investing your RMDs. OppenheimerFunds 529 Plans offer many benefits to help a family member such as a child or grandchild with higher education costs.
Allocate money to taxable accounts. You may no longer be seeking the possibility of aggressive portfolio growth but still like the idea of generating income. Reinvesting an RMD in taxable accounts allows for the possibility that your assets may keep growing. Investments such as bond funds may be an attractive strategy. And, you can learn the steps to opening an OppenheimerFunds account.
Open a Roth IRA. Even though you are no longer eligible for making Traditional IRA contributions, you may take an RMD and then contribute it to a Roth IRA. To do this you must have earned income equal or greater than the contribution amount and your income must fall below the Roth maximum contribution limits.
- This week, schedule an appointment with your financial advisor to review the options for your RMDs
This material is provided for general and educational purposes only, and is not intended to provide legal, tax or investment advice, or for use to avoid penalties that may be imposed under U.S. federal tax laws. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.
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