“Clearly, a lot of retirees have investment accounts that are impacted by the RMD rules. And here’s the amazing part: the mathematics of the RMD virtually guarantee that a portfolio cannot be liquidated within 45 years. The required minimum withdrawal may be inadequate to meet the needs of the retiree in the later years, but that is a different matter. On the other hand, the stipulated RMD may be more than the retiree needs to spend that year, so the excess above their needs can be reinvested into a taxable investment account — or simply stuffed in a mattress!”
LTC Comment (from Stephen A. Moses, President, Center for Long-Term Care Reform):
This article could help persuade some prospects to buy LTCI and some clients to absorb premium increases. Point: your required minimum distribution (RMD) at age 70 ½ is unlikely ever to consume your IRA nest egg. In fact, you’ll may be compelled to withdraw more and more annually as you age through your mid-90s. So maybe you can afford that LTCI policy after all, preserve your capital, and avoid having to shelter those IRA funds in order to get Medicaid.
How skillful RMD planning can sustain retirement portfolios