I read The "Good Old Days" and Required Minimum Distributions by Scott Burns at AssetBuilder. Maybe it’s because I’m not at that age yet. I just don’t understand why the Required Minimum Distributions (RMDs) are such a big deal.
If you believe the numbers reported in the newspapers about the retirement savings average Americans have, you will see people will want to and need to take money out of their IRAs to spend anyway. Those voluntary distributions will exceed the RMDs.
In addition, required minimum distributions are not required minimum spending. Nothing stops a retiree from putting the distributions into a taxable account. You are not eating into your principal. The government is a silent partner in your IRAs. They have been waiting patiently long enough. It’s time to cash them out. That’s all.
I also read these other interesting articles this week:
Reader with 20 credit cards asks: Will closing some hurt my credit score? by Brent Hunsberger at The Oregonian
Yes, no, it doesn’t matter. Just close them. While you are at it, open some better ones for some good bonuses and better rewards.
One Dip Into a 401(k) Often Leads to Another by Tara Siegel Bernard at New York Times
I’m disappointed to see it fell for the double tax myth again. Let me say this again. There are two taxes, unrelated to each other, which you will have to pay anyway with or without a 401k loan. If that’s double tax, you will always be double taxed.
Our Asset Allocation Spreadsheet by Michael at Financial Ramblings
If you are looking a spreadsheet for tracking how close you are to a rebalancing, check out the spreadsheet Michael put together. Also read Deciding When to Rebalance Your Investment Portfolio by the same author.
Alternatives to Traditional Savings Accounts by Matthew Amster-Burton at MintLife
Millionaire Interviews 2 by Lion at Wealth Lion
Another high earner who makes upwards to $300k in his 30s as a Senior Director at a manufacturing company. I think the book The Millionaire Next Door gave people the wrong impression that most wealthy people actually don’t have good income. Saving and investing are necessary but a good income will give you the ingredient for saving and investing to begin with.
MailBag: Why There Will Never Be A Successful Financial Advisor Review Site In The Foreseeable Future by Michael Kitces at Nerd’s Eye View
Could it be because the financial advisor would sue the reviewer for bad reviews? A wealth management company sued the blogger at Long Term Returns and it went offline.
The Best Way to Maximize Your Investment Return by Lion at Wealth Lion
Among the three building blocks for building wealth: savings, investment return, and time, which one is the most important? Pick one and see if you agree with Lion.
Should I Include My Primary Residence When Calculating Net Worth? The Case For Yes by Sam at Financial Samurai
Of course. Otherwise if you prepay your mortgage your net worth would take a plunge. How does that make any sense?
Why your house is an investment, and an asset, too by The Investor at Monevator
Some people don’t see it as an investment but it’s an asset for sure. What asset of significant value isn’t an investment?
Sudden wealth syndrome: Tips for avoiding potential pitfalls by Sarah Hammer at Vanguard Blog
I wish I’d have an opportunity to battle this syndrome but so far no luck.
Renaming The Outcomes Of A Monte Carlo Retirement Projection by Michael at Nerd’s Eye View
I agree with this. Running out of money shouldn’t be black & white. The depth and the necessary adjustment to bring it back matters a lot.
Talking About Taboo Subjects by Jim at The White Coat Investor
I don’t talk about money with colleagues. Instead I talk about it with you, strangers on the Internet.
Intentionally Increasing Income to Increase Social Security Benefits? by Mike Piper at Oblivious Investor
(A) it doesn’t work; (B) it’s not a good idea anyway if it does. Social Security benefits are progressive. A higher income (and higher taxes) bring very little incremental benefits.
Stocks: Getting Ready for a Train Wreck by Jason Zweig at The Wall Street Journal
I have a hard time reconciling the advice in this article — stay the course — with the author’s interview with Consuelo Mack of WealthTrack in which he said investors should keep cash for opportunities that may come by.