Financial Briefs

From Uncle Sam's perspective, it's only fair to tax you; you avoided paying tax on money you placed in a non-Roth IRA account, and he wants his cut. From your perspective, it's time to maximize your life savings by paying as little as possible in income tax on your withdrawals.

When RMDs kick in at age 70½, not following the rules can cost you real money. With a bit of strategic financial planning, however, you can turn the rules to your advantage.

Delay your first payment. You don't have to make your initial withdrawal at the midpoint of your 70th year. You can delay it up to April 1st of the following year. So, if you hit 70½ in October 2019, you could delay your withdrawal to March 31st, 2020. The downside is that, in 2020, you must pay taxes on two RMDs. That second withdrawal must occur by year-end of 2020. Planning it matters!