Posted on Jan 29, 2018
How can we as veterans and military retirees best prepare for minimum required distribution at age 70 and 1/2?
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The Tax Law of 2018 provides many opportunities which end in 2026 when the rates revert back to 2017 rates.
The Roth IRA is the primary tax-free investment vehicle. Many of us had traditional IRA's which were tax deferred and taxable investments and some had TSP investments.
1. Military retirement is taxable
2. Social Security income is generally taxable for those who have retirement income.
3. VA disability income is not taxable.
4. TSP assets are not convertible into a tax-free assets, by law.
The Roth IRA is the primary tax-free investment vehicle. Many of us had traditional IRA's which were tax deferred and taxable investments and some had TSP investments.
1. Military retirement is taxable
2. Social Security income is generally taxable for those who have retirement income.
3. VA disability income is not taxable.
4. TSP assets are not convertible into a tax-free assets, by law.
Retirement
Finance
Taxes
Investing
Edited 6 y ago
Posted 6 y ago
Responses: 4
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Great info
SMSgt Lawrence McCarter SrA Christopher Wright Sgt Randy Wilber SGT Gregory Lawritson Cpl (Join to see) Lt Col Scott Shuttleworth LTC (Join to see) MSG Frederick Otero SFC Pete Kain SSG David Andrews LCDR (Join to see) PO1 Tony Holland SCPO Morris Ramsey SPC Margaret Higgins SGT Jim Arnold SFC William H. PO1 William "Chip" Nagel SGT Charles H. Hawes SFC Craig Dalen CPL Dave Hoover
SMSgt Lawrence McCarter SrA Christopher Wright Sgt Randy Wilber SGT Gregory Lawritson Cpl (Join to see) Lt Col Scott Shuttleworth LTC (Join to see) MSG Frederick Otero SFC Pete Kain SSG David Andrews LCDR (Join to see) PO1 Tony Holland SCPO Morris Ramsey SPC Margaret Higgins SGT Jim Arnold SFC William H. PO1 William "Chip" Nagel SGT Charles H. Hawes SFC Craig Dalen CPL Dave Hoover
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Last Monday night I went to a presentation titled Tax strategies for smart investors which reinforced much of what I already knew. Move as much into tax free investment vehicles as I can afford to pay taxes on each year. I knew it need to be done as much as I could afford by age 70. Then I learned the Required Minimum Distribution (RMD) begins at age 70 and 1/2. I also learned that we can convert taxable and tax-deferred investment assets at any age so even if we are over 70 and 1/2 we can still move assets to reduce the taxable basis in future years.
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First choice is good, if you do it early. Later, you pay a big tax, also you can only do that before age 55, as I recall.
Choice two, is depending on projected longevity of your family along with immed financial needs.
The Roth is literally a no brainer. If I had known about them long ago, everything I have invested would be in them.
Choice two, is depending on projected longevity of your family along with immed financial needs.
The Roth is literally a no brainer. If I had known about them long ago, everything I have invested would be in them.
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MCPO Roger Collins
One additional point, learn the difference between a 401K and IRAs. IRAs give you more latitude in your investment decisions.
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LTC Stephen F.
MCPO Roger Collins - FYI 403 is the equivalent to 401 for non-profits such as universities, FFRDCs, and other research facilities.
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