How can we as veterans and military retirees best prepare for minimum required distribution at age 70 and 1/2?

2018-01-29T16:09:51-05:00

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.

Response by LTC Stephen F. made Jan 29 at 2018 4:16 PM

2018-01-29T16:16:10-05:00

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.

Response by Maj Marty Hogan made Jan 29 at 2018 5:38 PM

2018-01-29T17:38:55-05:00

Great info

Response by MCPO Roger Collins made Jan 29 at 2018 6:17 PM

2018-01-29T18:17:59-05:00

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.

Response by Sgt Randy Wilber made Jan 30 at 2018 12:40 AM

2018-01-30T00:40:03-05:00

Good information thanks for sharing LTC Stephen F.