Worried About Your Future RMDs? This Move Could Help You Avoid Them Altogether.
It's not free, but it could make a big difference to your future tax bills.
Overview
Ask a group of seniors how they feel about required minimum distributions (RMDs), and you'll probably get a bunch of different answers. Many don't ever have to think about them because they already withdraw more than enough to cover their living expenses each year. For others, they can be a real pain because they don't need the money right now. But they're forced to sell their investments and pay a higher tax bill anyway.
If you fall into the latter camp, the solution isn't to skip your RMD and hope the IRS doesn't notice. That will result in a costly 25% penalty. Instead, you can take your RMD this year and start laying the groundwork to reduce your future RMDs with Roth conversions. But there's a trade-off to doing so.
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Source
Originally published at www.fool.com.
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