Shane O’Hara, CFP®, CPWA®, Principal, Executive Vice President, and CCO at ProVise Management Group, provides insight into how to take your required minimum distributions (RMDs) once you reach age 73 and shares a few useful tips for minimizing taxes in the process.
Shane notes that a patient and strategic approach to RMDs can help you avoid higher tax hits. “While you’re allowed to take your first RMD as late as April 1 of the year after you turn RMD age (73 right now), it often makes sense to take it before December 31 of the year you turn RMD age instead,” said O’Hara. “Waiting can mean two RMDs in one tax year, which could push you into a higher bracket and increase Medicare premiums two years down the road.” Shane also identifies looking ahead, as far as 5-10 years, as a helpful tool for estimating future RMDs and reducing the tax bite later on.
