Ask the Hammer: Can I Use Money From an RMD to Contribute to a Retirement Account?
In this episode of Ask the Hammer, the Retirement Daily reader's question is:
My wife’s father may soon pass at roughly 84 years old. We understand how his IRAs will be transferred to her and the requirement that she exhaust those through RMDs within 10 years, regardless of her age. The catch is she is 60, so she has years left in her ability to make IRA contributions. I was wondering if she could take her RMDs from the inherited IRAs and then contribute up to her limits to her own IRA. The net result would be an offset of the inherited IRAs’ taxable effect by moving that extra income into her IRAs. Of course, officially these would be two separate transactions which just happen to offset.
Essentially, the question here is:
Can I use money from an RMD to contribute to a retirement account?
Our expert, Jeffrey "The Buckinghammer" Levine of Buckingham Wealth Partners, met with Retirement Daily editor Robert Powell to answer this question.
This episode covers:
- Whether or not it is possible to use RMD money to contribute to an IRA
- What a deductible contribution is and how it applies to this question
- What makes you eligible to make a deductible contribution
Make sure to watch the video to get all the necessary details and pearls of wisdom Levine has to offer.
Stay tuned for more Ask the Hammer!
Got questions?
Email AsktheHammer@BuckinghamGroup.com
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