Should You Delay RMDs? How Waiting Can Create an RMD Tax Trap

Just because you can delay Required Minimum Distributions (RMDs) does not always mean you should. For retirees with traditional IRAs, 403(b)s, and TIAA retirement accounts, waiting until RMDs begin can sometimes lead to larger taxable withdrawals later in retirement. As your account grows and the required withdrawal percentage increases with age, your first RMD could be substantially larger than expected. In this video, I explain: • When Required Minimum Distributions begin and why the starting age varies • How delaying withdrawals can increase future RMDs • What an “RMD tax trap” can look like • How Roth conversions may reduce future traditional IRA balances and RMDs • Why Roth IRAs generally do not have lifetime RMDs for the original owner • How Medicare, tax brackets, charitable giving, estate goals, and retirement income needs affect the decision • Why the years between retirement and your first RMD can be valuable tax-planning years Using a hypothetical example, we compare leaving $1 million invested until age 75 versus completing annual Roth conversions before RMDs begin. The goal is not to say everyone should convert to a Roth IRA or take distributions early. The goal is to look beyond this year’s tax bill and evaluate the potential lifetime tax impact of your retirement-income strategy. Emeritus Wealth Management helps university professors, administrators, and TIAA participants navigate retirement income, Roth conversions, Medicare, RMD planning, and tax-efficient retirement strategies. #RMD #RequiredMinimumDistributions #RothConversion #RetirementTaxPlanning #TIAA #IRA #403b #RetirementPlanning #MedicarePlanning Disclosure: This video is for educational and informational purposes only and is not investment, tax, legal, or accounting advice. Examples are hypothetical and illustrative. Actual investment returns, tax outcomes, RMDs, and Roth conversion results vary by individual circumstances. Consult your tax advisor, attorney, and financial professional before making financial decisions. Advisory services are offered through Stratos Wealth Advisors, LLC, a registered investment adviser. Emeritus Wealth Management is a separate entity.