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What to Do When You Have Extra Retirement Revenue Than Wanted

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With the S&P 500 hitting a record high in January, account balances have additionally reached new highs — and whereas which will imply an even bigger nest egg for some, it might result in increased taxes and surcharges for older retirees required to withdraw from pre-tax retirement accounts each month.

These withdrawal necessities, known as required minimal distributions (RMDs), imply that rising account balances result in bigger withdrawals and, in flip, larger taxable revenue. This could push folks over the age of 72 into the next income tax bracket or set off the online investment income tax of three.8% on returns from curiosity, dividends and capital positive factors. Such thresholds can come as an unwelcome shock — particularly for retirees who’ve extra revenue than they want.

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