Required minimum distribution begins/Carlos Pueblo
A day before
yesterday, I found the first portion of my required minimum distribution
arrived to
my bank account. It is from one of the company which I worked before the
century
changed and was a self-funded 401k with the same amount of after tax
contribution
in an annuity form. There are sources of my retirement all self-funded
except
social security benefit and a small amount of defined benefit from the above
firm with
401k, rollover IRA from HR-10 plan, Roth IRA, and after tax saving. This is
a
combination of retirement saving plan to support the deficit of social security
as
advocated
nationwide.
How much
retirement fund is enough for me to go through the rest of my life? It’s
all depended
on, my health, my frugality, and the performance of my investment.
In order to
make the life simpler, I don’t mortgage the house and no loan of any
Kinds which
means don’t make any purchase without cash at hands. This new income
will help me
to pay the year end federal income tax, local real estate tax and late
summer
European trip.
These deferred
tax retirement plans make sense if we consider that we pay higher
federal income
tax at the older age. It is because that we no longer have the dependents
deduction
and the IRS posts the minimum distribution in order to tax the retirement
fund. I
applaud such legislation during the years for such good laws.
When both of
my children entered the work force, they asked me for advice on deferred
tax and
retirement. I explained in details of my experience and they agreed and set up
a
plan to
contribute to the maximum of their earning. It has been more than 10 years for
both of them
and the significance of growth can be seen on their retirement assets. This
is a proof
of a simple theory that the wealth can be reached by earning, saving, and the
duration of
growth.
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