For 14 years, rules about withdrawing money from an IRA during retirement stayed basically the same. Since January 2001, they’ve changed twice, and radically. The new rules affect a huge number of people and in a very big way. To save you the trouble of reading 149 pages of new rules from the IRS, here’s a plain-English version covering the essentials you need to know.

Tables Are Set. The law requires that once you turn 70½, you begin making annual IRA withdrawals. The IRS provides tables showing the smallest amount you can take out each year, based on your age-your required minimum distribution (RMD). But the new rules presume substantially longer life expectancies than the original 1987 IRS tables, and that translates into substantially smaller RMDs. For instance, a 70½-year-old couple using the old table had a 20.6-year life expectancy, compared with 27.4 years under the new rules. To get your RMD, the IRS divides your retirement account assets by your life expectancy, and a larger divisor means a smaller RMD. Assuming you don’t need to withdraw more than the minimum, you’ll benefit from having lower taxable income, and the extra money that stays in the account will continue to compound tax-deferred. You can always take more than your RMD without penalty, but your RMD sets the minimum.

Spouses Rule. Under the old rules, if you named your spouse as beneficiary of your IRA video porno, you had to determine your joint life expectancy and then use a table to find your RMD. Now, there’s a single table that assumes your spouse is 10 years younger than you are. However, if your spouse is more than 10 years younger, you can calculate your RMD using his or her actual age in a separate IRS joint life expectancy table.

Birthday Trap. Although RMDs are generally lower under the new rules, they’re lowest for retirees with birthdays in the first half of the year. That’s because those who turn 70½ in January through June get to use the RMD for 70-year-olds-27.4 years-whereas those born after June have to use the 26.5-year life expectancy for 71-year-olds.

Non-Spouse Beneficiaries. If you want to change the beneficiary of your IRA from your spouse to your children or someone else, it will not affect your RMD-whereas under the old rules it might have affected your RMD. Unlike the old rules, which allowed you to recalculate your life expectancy with a non-spouse beneficiary, now you simply use your IRS life expectancy table.

When You Die. If your spouse is the beneficiary of your IRA, he or she has two choices when you die: keep the IRA in your name and continue withdrawals based on the same schedule; or roll the IRA into his or her own name and take RMDs based on his or her life expectancy. It’s often wise to roll it into the surviv-ing spouse’s name and specify new beneficiaries-perhaps your children. The new rules let your children inherit your IRA and take RMDs based on their life expectancies-an enormous benefit. Because a 60-year-old, for example, has a much longer life expectancy than an 80-year-old, the younger person can stretch IRA withdrawals over a much longer span, leaving the balance to grow tax-deferred for decades.

After You Die. Post-mortem planning is possible under the new rules. If an IRA names several beneficiaries at the time of death of the IRA owner, they have until September 30 of the year after the year of the death of the IRA owner to decide who will be the beneficiary for purposes of calculating the RMD. Suppose a wife is the beneficiary of her husband’s IRA, and a child and the husband’s favorite charity are secondary beneficiaries. When the husband dies, if the wife does nothing, the RMD will be based on her life expectancy. But if she doesn’t need all of the money in the IRA to live on, she can disclaim all or part of her share, and the remaining beneficiaries can take distributions that are best for them. A charity, for instance, has no life expectancy and will get its share in one lump sum and pay no tax on it. A child or children can inherit the IRA in separate shares and calculate the RMD based on their ages.

OMC Financial Services

Client services

We have listened to our clients over the years tell us what is important to them. As a result, we have built our practice stressing high quality, personal attention to each client. We have put together a dedicated staff that knows who you are when you call, ensuring that your questions or concerns can be addressed immediately. We pride ourselves on a seamless delivery of service to you. For example, whether it is coordinating personal and pension accounts, withdrawing or adding money to your management account, changing beneficiaries for an IRA or providing tax information to you, we want to make your investment experience as uncomplicated and simple as possible. Click here to go to Client Communications

Independent, objective advice

OMC Financial Services, a registered investment advisor, is an independent management firm that is not commission driven. All accounts that are held at Charles Schwab and Co. are fee-based, non-commission accounts*. We work only for you and that means your success is our success.

*The associates of OMC are also registered representatives of FSC Securities Corporation of porno, and as such, sell securities products on a commissionable basis, as disclosed pursuant to federal and state securities laws. This does not apply to new clients of OMC.

  • Client Communication
  • Schwab Institutional

We believe that regular, thorough communication is one of our most important services. As a client of OMC you receive:

Easy access to staff – We have an 800 number and an email address so you can contact us no matter where you are. During business hours, you speak to a real person, not a voice mail system or an automated menu. Someone is always available to answer your questions.
Annual reviews – Change is inevitable, so we conduct annual reviews with every client. This way we can keep up with each other as well as changes in the market or tax laws.
Quarterly performance reports – Every three months OMC provides a summary of your holdings and their current value, along with purchase dates and cost basis. We also show performance for the quarter. These reports are straightforward and easy to read.
Capital gain/loss reports – OMC provides you and/or your tax professional with reports that detail your capital gains and losses for the year. You will receive this tax information throughout the year. A December report is issued to help with any last-minute tax planning
Access to account information – Through our website you can access holdings, values, etc. on your account. Please note this area is currently under construction.
Monthly Schwab reports – Schwab will send out a report of your portfolio holdings each month.

Schwab Institutional

Client assets are held in accounts at Schwab Institutional, a leader in working with independent advisors such as OMC. This affiliation provides many advantages for OMC and our clients:

Discounted transaction costs – We can purchase mutual funds with no loads or transaction fees through Schwab One-Source. Rates on trades in individual securities are discounted. We negotiate periodically with Schwab to keep transaction costs as low as possible.
Moneylink – Schwab’s Moneylink service allows us to transfer funds from our clients’ investment or IRA accounts directly to their bank accounts. The service is free, quicker than regular mail, and can be completed while you are traveling, if necessary.
Institutional trading desk – All of our trades are made through experienced traders who work exclusively with fee-based managers.
Computer link – A special computer link between OMC and Schwab Institutional gives us instant access to your investments. This enables us to submit trades and monitor all activity in your account.
Dedicated service team – A select service group at Schwab helps us track accounts, disburse funds, establish/transfer/rollover accounts, etc.