RMD exceeds spending plan

Occasionally a client may have a required minimum distribution (RMD) amount coming out of their IRA that is larger than their total planned spending for a given year. When this happens, an advisor will typically do one of two things:

1. Let the client spend the surplus OR
2. Transfer the surplus to a client's non-qualified account.

Option 1: Spend the surplus

In the example below, the client has a planned withdrawal this year of $13,750 and an RMD of $15,000. The plan will be updated to reflect the excess $1,250 getting spent by the client.

Update the plan to reflect the added spending

1. Advisors typically use the Liquidity page to enter an RMD.
   • The text will turn red if your RMD is larger than your planned withdrawal amount.
2. Add an additional planned spending amount
   • Notice that the change in the overall indicator reflects this additional spending amount.
   • The liquidity page now reflects the full amount of the RMD being spent by the client.

Option 2: Transfer the surplus to a non-qualified account

In the example below, the client has a planned withdrawal this year of $13,750, but an RMD of $15,000. The excess $1,250 will be transferred to the client's NQ account.

Step 1. Set up the transfer

1. Update assets
2. Edit the plan (Overview > Edit Plan).
   • Click Save on the General page
3. Create the transfer
   • Click Manage transfers
   • In the pop-up window, click Add New (not pictured)
   • Select the appropriate From account, To account, and amount. (If desired, enter and federal or state withholdings and any optional notes).
   • Click Save

Step 2. Place the trade

Follow these steps to place the trade.

This transfer will result in both a sell out of the IRA and a buy into the NQ. Your trade spreadsheet will need to be manually separated so you can place the sells today and the buys after you have transferred the cash into the NQ account.