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Figuring Your RMD -- How Much You Have To Spend As A Retiree

Wednesday, July 31, 2013 - 6:35 AM
Here’s a term you may not have heard: decumulation, the opposite of accumulation.

It’s a real word, and The Center for Retirement Research at Boston College uses it for a novel approach to figuring out how much of one’s savings can be spent each year in retirement. The study suggests retirees use the required minimum distribution set by the IRS rather than the “4% Rule” used by many financial planners, investors and retirees.

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ShorebreakShorebreak2,674 posts since
Apr 6, 2010
Rep Points: 14,510
1. Wednesday, July 31, 2013 - 7:42 AM
I think the title is misleading "How Much You Have to Spend As A Retiree"

The idea of an RMD is a way for the government to make sure we pay taxes on the money we have saved tax-free in those IRA accounts.   They can't force us to "Spend" it.   We don't "Have to" do anything but make sure the taxes are paid on the correct amounts.  If some or the entire amount isn't needed that year, one can put it into a CD or another place to earn some interest. We just can't put it back into an another IRA.  Unfortunately, with interest rates this low, spending it or using it for a loved one who needs it can be a better option.   What we do with the money once withdrawn and paid all taxes due, is still up to us.  I don't agree with "forced saving" or "forced spending".  We still have some rights in this country.

paoli2paoli21,400 posts since
Aug 10, 2011
Rep Points: 6,132
2. Thursday, August 1, 2013 - 2:57 PM
We also took advantage of IRA's both traditional and Roth. I don't need the RMD's but enjoy giving it to the children. I also try to convert some to a Roth every year. Hoping to never have to use it but it will be there if needed with taxes already paid and if I don't use it the kids will have it tax free. 
Ally6770Ally6770930 posts since
Jan 16, 2010
Rep Points: 2,706