How Required Minimum Distributions Can Triple Your Taxes (Part 1)

In part two of our Required Minimum Distribution video I show you the HUGE tax increase that Jane is facing with upon becoming a widow.

Not only do her income taxes (and brackets) increase dramatically but the tax on her Social Security does as well PLUS she now will pay more than double premiums on Medicare Part B and D.

It gets worse too folks.

The longer she lives, the larger her RMDs will be and the larger ALL three of those taxes will be as well.

The funny thing is that Jane actually is living on LESS income than when Bob was alive and yet is paying much more in tax!

Again, it’s not just the tax rates and taxable income you need to be considering. It’s the tax on your Social Security benefits PLUS the increase in Medicare premiums as well.

Unfortunately, now the only way Jane can avoid these increases in tax is to give her RMDs to charity. There is no other way.

Should have done tax planning in her 50s, which is what I call the “Golden Years of Tax Planning.”

I’ll post videos of some strategies on that topic soon.

So, SUBSCRIBE!

Once again thanks goes out to Don Pistulka at Pistulka.com for his wonderful spreadsheets!

Other important links:
https://www.ssa.gov/pubs/EN-05-10536.pdf
https://www.irs.gov/taxtopics/tc751


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Required Minimum Distributions (RMDs) are a TAX BOMB that many soon-to-be retirees are ignorant of.

You can’t afford to be.

Your RMDs can be absolutely BRUTAL when it comes to your taxes.

RMDs can certainly put you into a higher tax bracket, thus you pay more to the IRS.

However, RMDs can also increase your Social Security taxation too.

And, yes AND, RMDs can increase your Medicare Part B and D premiums as well!

Oh, we’re not talking small increases in premiums either. Doesn’t take much income to have your Medicare premiums double..and more.

In this video, we bring back Bob and Jane, our favorite pre-retiree couple.

But now they are only 55 years old. Bob doesn’t work. Jane has $400k in her 401k that she is going to stop contributing to.

She expects to get 6% annual rate of return. And will not take anything out of it until she is 70 years old.

Just watch what happens next.

You’ll be shocked.

I need to recognize Don Pistulka for the spreadsheets he has created and made readily available for the whole world to use. Just a wonderful resource indeed. His website is here… http://pistulka.com/

Other important links:
https://www.ssa.gov/pubs/EN-05-10536.pdf
https://www.irs.gov/taxtopics/tc751

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