Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

: Lisa has just turned 70 in 2018 on May 11 th , and she is now required to take her required minimum distributions (RMD)

: Lisa has just turned 70 in 2018 on May 11th, and she is now required to take her required minimum distributions (RMD) from all her IRA accounts (see list below). Lisa has just retired from her job and she will be living off social security and her RMDs for the remainder of her life. She has the option of delaying the first RMD till 2019, both then she will be required to take both her 2018 and 2019 RMDs in the same year (2019).

Asset Description

Owner

Amount (as of 12/31/2017)

IRA - #1

Lisa

$1,000,000.00

IRA - #2

Lisa

$ 400,000.00

Total assets

$1,400,000.00

To advise Lisa on what she should do regarding her RMDs and whether to take one on 2018 or both in 2019, you need to address the following items:

  1. What it Lisas RMD for 2018? You can use the FINRA RMD Calculator located at https://tools.finra.org/rmd/.
  2. What is Lisas RMD for 2019 if she has already taken the 2018 RMD? Assume an annual 5% return on the assets for 2018?
  3. What is Lisas RMD for 2019 if she decides to take both the 2018 and 2019 RMDs in 2019? Assume an annual 5% return on the assets for 2018?
  4. If Lisas marginal tax rate in 2018 is 35% (while still had work income), dropping to 24% in 2019 when she is fully retired; when should she take her 2018 RMD (2018 or 2019)? Make sure to show how you came to your conclusion by showing calculations.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Forex This Book Includes Forex Beginners Forex

Authors: Jordon Sykes

1st Edition

154063180X, 978-1540631800

More Books

Students also viewed these Finance questions

Question

Management (inaugurated) the recycling policy six months ago.

Answered: 1 week ago