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Thu Mar 26, 2020, 02:40 PM

Honestly, I'd rather not

The stimulus passed by Congress is aimed to help the unemployed and businesses losing business.

But for retirees who have not lost any source of income, whose Social Security checks do come (so far) and some of them are stuck with high RMD's even though the value of their retirement funds is dropping - I'd rather not have this check that is taxable.

Yes, I suppose many would love to have this problem but I'd rather have our proposed $2400 check go to someone who really can use it.


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Response to question everything (Original post)

Thu Mar 26, 2020, 02:42 PM

1. Maybe we could view ourselves as trustees of this money?

I don't see how I could need this money. I can look around and see who does need money, and just donate it to a few places.

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Response to raging moderate (Reply #1)

Thu Mar 26, 2020, 02:47 PM

4. Agree. I have been thinking of doing this with the RMD

When, supposedly transferring directly from the account to a qualified charity lower the taxable withdrawal.

I just need to look around and to find how this works and for whom..

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Response to question everything (Reply #4)

Thu Mar 26, 2020, 06:06 PM

9. I read great things about it - QCD's - Qualified Charitable Distributions, but one must be age 70.5+

(the Secure Act didn't change that age, even though it changed the first year RMD age to 72).

Basically one satisfies one's RMD requirement by donating it to charity (in the prescribed way of course -- via a direct transfer from the IRA to the charity and all that) and pay no taxes, and neither does the charity (so they get the benefit of the full amount transferred).

Edited to add: one can donate any amount -- less than the RMD, equal to the RMD, or greater than the RMD (there might be a max limit though) and whatever amount is transferred to the charity is tax free to everybody.

Doesn't matter if one is taking the standard deduction or not either -- it's not deductible anyway. Rather, its a checkbox / code on one's 1099-R or whatever that makes it tax free.

So far I haven't reached 70.5, so haven't been able to do this. But have been reading about it in Bob Carlson's "Retirement Watch" newsletter and various other places.

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Response to progree (Reply #9)

Thu Mar 26, 2020, 11:09 PM

11. That's what my sister is doing with her RMD

When I get old enough, I will, too.

I'm not sure what I will do with my government check. I don't need it at all. Maybe I will use it for political contributions to Democratic candidates!

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Response to question everything (Original post)

Thu Mar 26, 2020, 02:46 PM

2. For myself......

I have no problem accepting it since it will be a very small portion of what my IRA has lost thanks to the "Trump Economy!"

I was fortunate enough to be able to wait out PRESIDENT OBAMA'S rescue and did recover from the "Bush Economy" - and yes, it did continue to grow thanks to the work PRESIDENT OBAMA had done to help the country and markets heal.

But now - not so sure I'll be around to see things ever get back to where they were before this latest "incident."

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Response to question everything (Original post)

Thu Mar 26, 2020, 02:46 PM

3. Mine will go to Democratic candidates who don't lie to me.

Also the company I retired from notified me their foundation will match donations 2 to 1 for one of three charities. One of which we already support. I am gonna avail myself of that just on the if come of my stimulus check.

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Response to question everything (Original post)

Thu Mar 26, 2020, 03:14 PM

5. Better you say who it helps

Than let Mnuchin or Shit for Brains decide.

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Response to tazkcmo (Reply #5)

Thu Mar 26, 2020, 03:20 PM

6. That, too

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Response to question everything (Original post)

Thu Mar 26, 2020, 05:14 PM

7. Mine's going to my daughters (and grands.)

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Response to question everything (Original post)

Thu Mar 26, 2020, 05:26 PM

8. On IRA RMD's -- an RMD is a transfer from a traditional IRA account to a regular taxable account

But for retirees ... and some of them are stuck with high RMD's even though the value of their retirement funds is dropping


I'm still not getting why this is some horrible wealth-killing thing. I've been taking RMD's on an inherited IRA since about 2005, and so far it hasn't killed me.

Yes, once it has been transferred to a regular taxable account, one has to then annually pay taxes on any gains and income that money produces going forward (the horror the horror).

Of course I have to pay taxes on the RMD distribution, but my parents got a tax break decades ago when they contributed to it.

They knew what the deal was when they signed up for the IRA and took the tax deduction and enjoyed decades of not paying taxes on it. Likewise I contributed to IRAs and 401k's for decades knowing what the deal was -- it's a multi-decade tax-deferral deal, not an eternal tax-deferral (and therefore tax-free) deal.

In some years, I've taken RMDs during down markets via selling assets into cash, and then transferring the cash to a regular taxable account, and then buying similar or different assets (as part of an annual portfolio rebalancing process) a couple days later when the transactions have settled, also at down market prices (known as sell low buy low).

Some IRA custodians allow one to take IRA distributions via transfers of shares from the IRA account to the regular taxable account, so there's not the sell-transfer-buy that I described above. Unfortunately, Fidelity, the custodian of my inherited IRA, isn't one of those, based on a test run I did. (One might be able to do it by phone or written request). Vanguard appears to be one that does allow electronic transfer of shares.

That said, I just read an article that the Senate-passed version of the Cares Act does away with RMDs for 2020, I presume this will make it into the final version. I don't know if one has to "catch up" in some later year though (i.e. it might be deferring the 2020 RMD, not eliminating it).

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As for getting a $2400 check (or whatever is left of it after paying taxes on it) - one can always donate it to charity -- I'm sure their fund-raising is way way down because people are pretty hunkered down financially with the uncertainty about how bad Covid-19 is going to get, and how much further the stock market will plummet (S&P 500 is down 22.3% from February's peak, as of today's, Thursday's close, and there's no more "stimulus" good news on the horizon -- well maybe one more day when the House passes it and the Orange ShitGibbon signs it)

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Response to question everything (Original post)

Thu Mar 26, 2020, 06:28 PM

10. If you really don't need it, you can pass it on to someone who does. Franklin Graham is needy.

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