11-09-2017 Columns

Required withdrawals from retirement plans: what should you know?

You may spend decades contributing to your IRA and 401(k). But, eventually, you’ll need to use this money. Before that day arrives, you’ll want to be familiar with the rules governing withdrawals – and you’ll want to know just how much you should take out.

To begin with, withdrawals from traditional employer-sponsored retirement plans like these fall under the Internal Revenue Service’s “required minimum distributions” (RMD) guidelines. (You aren’t required to take these distributions from a Roth IRA.) Here are some of the key RMD points to keep in mind:

You need to take distributions by age 70-1/2. You generally should begin taking RMDs in the year in which you turn 70-1/2. If you don’t take your first RMD during that year, you must take it no later than April 1 of the following year. If you do put it off until April 1, you must take two distributions in one year.

If you don’t take your RMDs on time, you may have to pay the IRS a 50 percent penalty tax on the taxable portion of your uncollected distribution — so make sure you know your dates.

You can take more than the minimum. You can withdraw more than the RMD, but, as the word “required” suggests, you can’t withdraw less.

You may be able to delay RMDs in an employer’s retirement plan if you’re still working. If your employer’s retirement plan permits it, you may not have to take RMDs if you are still working and you are 70-1/2 or older. However, this exception won’t apply if you own 5 percent or more of your company.

To determine your RMD, you’ll need to use either the Uniform Lifetime Table, which is based on your life expectancy, or the Joint Life Table, if you have a spouse who is the sole beneficiary and who is more than 10 years younger. Your tax advisor can help you make this selection.

So, now that you know the basic rules of RMDs, you’ll need to consider their impact on your retirement income. As mentioned above, you can certainly take out more than the RMD, but should you? If you need the extra money, then you’ll have to take it. However, when determining how much you should take beyond your RMDs, you’ll need to weigh some other factors.

For one thing, if you can delay taking Social Security, you’ll get bigger checks, so you might be able to lower the amounts you take from your 401(k) and IRA.

Another factor to consider is the size and composition of your investment portfolio held outside your retirement accounts. If you have a sizable amount of investments, with some of them providing regular income, you may be able to afford to take out only your RMDs, or perhaps just slightly more. On the other hand, if your 401(k) and IRA make up the vast majority of your investment holdings, you might need to rely on them much more heavily.

In any case, though, you will need to establish an appropriate withdrawal rate for all your investments to ensure you won’t outlive your money. A financial professional can help you calculate this rate. Do whatever it takes to maximize your benefits from your IRA and 401(k). They’re valuable assets – so use them wisely.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

According to the American Foundation for Suicide Prevention, an American dies of suicide every 12.3 minutes & Americans attempt suicide an estimated 1.1 million times annually. These are frightening statistics, and they only become more alarming the closer you look to home.

In Michigan, one person dies from suicide approximately every six hours on average, making suicide one of the top ten leading causes of death in our state. According to the American Foundation for Suicide Prevention, it is also our state’s second leading cause of death for ages 15-34.

In Berrien County alone, there is an average of 25 suicides per year. That is a number that breaks my heart.

Suicide affects our friends, family, schools & community. That is why it is so important to increase awareness on how we can work together at the local & national levels to prevent suicide.

Right in our area, we have many great resources for help such as the Berrien County Suicide Prevention Coalition, which can be found online at www.berriencares.org, and the Riverwood community mental health center, which provides mental health services & substance use disorder services to residents of Berrien County and can be found at www.riverwoodcenter.org.

If you or a loved one is struggling with this affliction, please reach out to someone. You can contact one of the local organizations listed above, or call the National Crisis and Suicide Hotline at 1-800-273-TALK (8255).

As your legislator, I firmly believe that all life is precious. Therefore, I will continue to raise awareness about this issue and to support initiatives aimed at suicide prevention. We must all do our part in this battle because every little bit makes a difference.

As always, if you have any questions or concerns about state government, do not hesitate to contact my office by calling 517-373-1403 or emailing KimLaSata@house.mi.gov.

Time for tax reform is now

Our tax system is broken and has not been updated since 1986. Since that time, is had become a complicated mess. I have heard countless stories from constituents impacted by a tax code that is outdated, unwieldy, and too often rewards special interests at the cost of regular folks. It has become abundantly clear that our old tax code is a major drag on our economy and on Michigan families struggling to get by.

This is why I support efforts to advance pro-growth, pro-America tax reform and relief. More specifically, I support H.R. 1, the Tax Cuts and Jobs Act, which was introduced in the U.S. House of Representatives. This historic piece of legislation will reform our tax code, delivering more jobs, fairer taxes, and bigger paychecks for all Americans.

According to a new study by the non-partisan New Tax Foundation, it was found that the Tax Cuts and Jobs Act will create 970,000 new jobs and grow wages by 4.4 percent for middle-class families. In Michigan alone, that would mean nearly 30,000 new jobs and an average wage increase of $2,512. Additionally, with this bold bill, a typical middle-class family of four earning $59,000 (the median household income) will see a $1,182 tax cut.

I am confident that we can deliver this historic tax reform and relief this year and look forward to working with my colleagues here in the House and the Senate and with the Administration to deliver results for families and businesses in Michigan and across the country.

To learn more about this and other important legislative issues, please visit my website: upton.house.gov or call my offices in Kalamazoo (269-385-0039), St. Joseph/Benton Harbor (269-982-1986), or Washington, D.C. (202-225-3761).

Thanking our veterans

Saturday, Nov. 11 is Veterans Day. It is a time to thank the courageous men and women who have served our country so that we may remain the land of the free.

The holiday was first known as Armistice Day, recognized on the 11th hour of the 11th day of the 11th month to commemorate the end of World War I.

America’s finest have always answered the call to stand up for freedom and liberty, and one of my greatest honors as your senator is taking part in tributes throughout Southwest Michigan to thank our service men and women for their outstanding dedication.

We can never fully thank our veterans enough for putting their country before themselves to protect and preserve our freedom and way of life. Understanding this debt to our veterans and their families, I am proud that we have made significant strides to show our deep appreciation in a meaningful way.

The Michigan Veterans Affairs Agency provides valuable services to our state’s more than 660,000 military veterans, which is the 11th largest veteran population in the nation.

I encourage all Southwest Michigan veterans to make sure that they are receiving the benefits they earned by visiting www.MichiganVeterans.com or by calling 1-800-MICH-VET.

Our service members and their families make enormous sacrifices to protect us.

I hope you will join with me in recognizing and thanking these heroes for their sacrifice and service. God bless our veterans.

As always, I look forward to hearing your comments and feedback on the important issues facing Michigan. You can contact me at 517-373-6960.

Carbon monoxide awareness

When power outages occur after severe weather, using alternative sources of power can cause carbon monoxide (CO) to build up in a home and poison the people and animals inside. Every year, at least 430 people die in the U.S. from accidental CO poisoning. Approximately 50,000 people in the U.S. visit the emergency department each year due to accidental CO poisoning.

Carbon monoxide is found in fumes produced by portable generators, stoves, lanterns, and gas ranges, or by burning charcoal and wood. CO from these sources can build up in enclosed or partially enclosed spaces. People and animals in these spaces can be poisoned and can die from breathing CO.

The most common symptoms of CO poisoning are headache, dizziness, weakness, nausea, vomiting, chest pain, and confusion. People who are sleeping or who have been drinking alcohol can die from CO poisoning before ever having symptoms.

There are steps you can take to help protect yourself and your household from CO poisoning: Never use a gas range or oven to heat a home; Never leave the motor running in a vehicle parked in an enclosed or partially enclosed space, such as a garage; Never run a generator, pressure washer, or any gasoline-powered engine inside a basement, garage, or other enclosed structure, even if the doors or windows are open, unless the equipment is professionally installed and vented. Keep vents and flues free of debris, especially if winds are high. And never use a charcoal grill, hibachi, lantern, or portable camping stove inside a home, tent, or camper.

Change the batteries in your CO detector every six months. If you don’t have a battery-powered or battery back-up CO detector, buy one soon.

CO poisoning is entirely preventable. You can protect yourself and your family by acting wisely in case of a power outage and learning the symptoms of CO poisoning.