There are many ways to make both large and small mistakes when it comes to Required Minimum Distributions (RMDs). This series covers a few.
Can you aggregate RMDs? Yes, for some account types. Should you aggregate your RMDs? Not unless you have a really good reason to.
When a spouse inherits retirement account assets, they have the right to do what is called a “Spousal Rollover” or “Spousal Transfer.” It is almost always the right option.
If you are a mixed-decade couple, take advantage of the Joint divisor by making your spouse your primary and sole beneficiary for your IRA and use the Joint Life and Last Survivor Expectancy Table to find your RMD.
The key to getting the waiver though is showing that “you are taking reasonable steps to remedy the shortfall.”
Although legally fine, this strategy often causes you to accidentally increase your spending every year and decrease your savings. Don’t let the IRS rules about IRA withdrawals tempt you into spending money you had planned to save.
Some people don’t stop at distributing just the required minimum. They think, “Well, while I’m at it, I may as well pull out a little bit more so we can fully cover the kitchen remodel…”