Three Words You May Need to Know: Required. Minimum. Distribution. 

If you are of a certain age and have certain retirement accounts, you probably need to know about the annually required withdrawals from those accounts. The IRS calls them “Required Minimum Distributions”—RMDs.

One special note: Clients, many of you are already treating your retirement account like an orchard, taking out the fruit crop each year to live on. The RMD is not an “extra” amount on top of the crop: it is just a minimum. If you are already taking out 5% in monthly payments to fund your retirement, you don’t need to worry about what happens at age 73.

We’ll talk about the details here, then how it works out in practice.

People born in or before 1950 with any form of retirement account (other than Roth IRA) have already begun doing this RMD process each year (or should have). People born in 1951 or later will have to begin by the year they turn 73.

The actual amount required is a function of age and the prior year-end balance. For example, a 73-year-old has to take out a little less than 3.8%. In round numbers, this would be $3,800 per $100,000 in the account. But that fraction goes up a little every year: 80-year-olds are closer to 5%, 90-year-olds have to take out more than 8%.

Basically, the RMD needs to be calculated for each retirement account you have (except Roth IRAs). You must take out the total amount required by December 31, and you will receive a 1099-R showing taxable income.

Clients, you know we pay attention to this and strive to keep you informed about what needs to be done. But there’s one thing to be careful of: take this as an opportunity to check whether there is some account somewhere that we don’t know about, like a 401(k) from a former employer, an odd IRA balance somewhere, 457 or 403(b) plans, and so on. It happens, but it would be a pain to get yourself into some trouble over an account that’s been out of sight, out of mind.

Some people may choose to use the onset of RMDs as a time to consolidate all of their retirement funds into a single rollover IRA, to make this process simpler going forward.

One of the advantages of Roth IRAs is that they have no RMD requirement. As a matter of good planning, it may make sense to convert partial IRA balances to Roth, pay tax when you choose, and whittle down that balance that is subject to RMDs in traditional retirement accounts.

There are lots of ways to handle things! If you’d like to talk about it, we’re here for it. Email us or call.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.


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Three Words You May Need to Know: Required. Minimum. Distribution. 228Main.com Presents: The Best of Leibman Financial Services

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Are We on the Ship of Theseus? 

The legend goes like this: after the Greek hero Theseus slayed the minotaur and saved a bunch of people, he escaped on a ship. Later, to honor him, the people of Athens would take the ship out each year and sail it on a pilgrimage. 

As time passed, the people had to replace an odd plank here and there. The boards of the ship would decay or break, as boards do. It’s basic maintenance. 

But a question emerged. After generations, the ship reached a point where none of its pieces were “original,” so to speak. So… was it still the same ship? 

This is mostly a philosophical question, but it offers an interesting puzzle about the nature of things in our everyday lives. This enterprise comes to mind. When I, Mark, started Leibman Financial Services at my kitchen table in 1996, there was no telling that the business would become what it is today. 

And yet, we haven’t changed anything fundamental about what we’re doing here. I set out to build something that would let me try to help people grow their buckets. I operated with the understanding that when others are better off, I probably will be too. 

Those things still stand, today. The ship is still a ship. 

But my life looks radically different from when I first set foot on this ship. Two of my co-owners were still children at home with me. (And we wouldn’t even meet our other co-owner for another decade and a half!) 

In what ways do things change—and how do they stay the same—as they grow? The ship remains, but it is not the same. 

This type of conversation might sound familiar. We’ve enjoyed talking about similar ideas before, like how things have the potential to become greater than the sum of their parts, how “teamwork makes the dream work,” and how we never step in the same river twice. 

No matter how you think about it, it can be amazing, this whole “life” thing. It’s a privilege to be here, building something with you. 

Come by to chat about this or anything else, any time. 


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In and Out of the Comfort Zone  

Once there was a man who was never satisfied, who always wanted more. He always needed to get to the next level. He had a goal of making a million dollars a year, then he wanted two million, and then a million a month, then two million a month. And that was not enough, either. He had wealth, he had fame, he had all the stuff money can buy, but he never had enough. 

Some preach that this striving is a virtue. “You can’t make progress unless you are willing to get out of your comfort zone.” Carried to the extreme, the mindset seems like a treadmill—or a trap, even. Always pushing, never satisfied? Sounds like it could be a sad way to spend one’s life. 

On the other hand, a friend told us a while back about her grandmother, who always said, “I have enough, and enough is as good as a feast.” One imagines that Granny was as content with life as a person could be. 

But taking that to the extreme, where would progress or innovation happen if everyone resigned themselves to living with things just as they were? Would anything change in a world where everything was perfectly comfortable and everyone had what they needed already? 

It is for each of us to sort out what we want out of life, how to get it, and the meaning of happiness. And that might mean figuring out what we need to do differently to get there, and then recognizing it once we have gotten what we need in terms of money and stuff. 

Then, once we’re comfortable in one area, we might turn our aspirations to more elevating topics—maybe helping family, developing new skills, or improving the community.  

For instance, can you imagine a community rec center in our little town? Or a scholarship endowment whose income would help any graduating seniors on their way to a trade or to higher education? More vibrant community organizations? These are some of the next-level things I’m dreaming about. 

We can be comfortable with what we have, and we can exercise our ambition to make the world better. We enjoy the satisfaction of our comfort zone in some ways and move ourselves out of it to dream big in other ways. 

Clients, if you would like to explore the ins and outs of your comfort zone, email us or call. 


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Three Words You May Need to Know: Required. Minimum. Distribution. 228Main.com Presents: The Best of Leibman Financial Services

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Spending Smarter

Our brains are so good at getting used to things that they will keep chasing new pleasures, new experiences, and the next thing to bring us a boost. But research shows there’s more bang for our buck by treating ourselves more frequently, in smaller doses—and our wallets might thank us. 


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Embracing the Absurd: Some Lessons from Seinfeld 

Picture courtesy of NBC

As we navigate our working years, there will be times of uncertainty. We may question our motivations, our goals, or the impact we are making. We may be searching for a partner to share the journey. We may wonder what it is we’re working toward. Questioning things is completely normal.

There was a fictional group of friends who were often switching careers, struggling in their romantic lives, and just trying to find their way. Anyone else remember Seinfeld? Okay, so it’s hard to say that this show represented “normal,” but it’s all relative, huh?

Seinfeld follows the lives of four friends in New York: Jerry, George, Elaine, and Kramer. Each character has their own goals, career paths, hardships, and hangups—their lives couldn’t be more different, but they supported one another through it all. Sometimes it takes tough love, but they keep each other humble. (Like when Jerry has to break the news to Elaine that her dancing is atrocious.)

Life can get complicated; Seinfeld reminds us to work with the hand we’ve been dealt. George always tries to take things with a grain of salt. As he once said, “Divorce is very difficult. Especially on a kid. Of course, I’m the result of my parents having stayed together, so you never know.” (George’s life could sometimes be a mess, but hey, we all have troubles!)

The show reminds us that while starting over can be scary, it can also be exhilarating. We get to experience “firsts” all over again. Elaine is a good example. There’s the first time meeting new coworkers, the first time holding hands on a date, the first time we get a fresh paycheck and get to decide what to do with it. Elaine shows us that it only takes a little energy—and maybe a commercial break—to jump back into it. All these opportunities wouldn’t be available if we didn’t keep putting ourselves out there.

There is never going to be a perfect way to handle a hard situation. But that doesn’t mean we can ignore our challenges, to never learn or grow. Kramer tends to think of his life as “doing what I do, the way I’ve always done it, the way I’ll always do it,” but that won’t get most of us very far.

It’s good to remember why we keep at it, too. We don’t want to be like Jerry and think, “Why do I always have the feeling that everybody’s doing something better than me on Saturday afternoons?” We don’t need the same plans as everyone else: we need the plans that work for us, the ones we actually want to be enjoying!

Do our actions align with our goals? Is there anything we could be doing differently? The funny this is, Seinfeld is known for being a show “about nothing,” so it does give us a chance to think about what all this is adding up to. Are we headed for a retirement like Jerry’s parents, with a condo in The Pines of Mar Gables? Are our plans, our support system, and everything else pointing us in the right direction?

Seinfeld may resonate with some of us because we enjoy comedy, but we also enjoy the fact that the characters show up for each other and keep at it, time after time, even when life is at its most absurd. It’s not a bad reminder.

Whether you’re starting a new job, a new relationship, or a new stage in your journey, we wish you the best. It’s aways better if you can lean on your friends and get some laughs in along the way.

Call or email us, anytime – our perspectives are free, just like your friends.


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Embracing the Absurd: Some Lessons from Seinfeld 228Main.com Presents: The Best of Leibman Financial Services

This text is available at https://www.228Main.com/. Picture courtesy of NBC.

The Best Time To Start

“Well begun is half done,” the proverb says. And we tend to agree. Since it’s your journey, we don’t like to sweat the particulars: it’s never too early to start, but it’s also never too late.


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The Ultimate Hedge: How Do We Enjoy the Journey to Long-Term Wealth?

A road with yellow text that reads: Let's go

Suppose someone told you, “I’m worried about what will happen in the future, so I want to make sure I have less money when I get there.”

This makes no sense, and yet, it is essentially what conventional investing wisdom tells anxious investors to do: “Hedge your risks! Seek safety!” But what does this mean? When investors choose “safety,” they are sacrificing their growth over the long term. In return for stability in the short term, they are choosing a smoother ride to a poorer future.

It’s human and normal to feel concern for the future. But choosing, in the moment, to soothe that short-term fear about long-term returns by avoiding volatility means you may be sacrificing those exact long-term returns that would soothe your concerns.

And investing for the long term doesn’t mean foregoing spending—it means a little bit less short-term spending now in exchange for (hopefully) a little more spending overall, in the long run. Spending more money now does mean that you will miss out on opportunities to invest that money for compounding returns, so it can be another road to a poorer future.

Choosing to invest for the long run is not a path of deprivation. Suppose the worst of the worst just happened last week: nuclear war broke out, or a giant asteroid hit Texas, or maybe you got struck by lightning. Should the worst happen, you are not likely to go out wishing that you had invested more conservatively: “If only my balances hadn’t wiggled so much! If only my returns had been lower!”

But maybe you could go out a little more content knowing that at least you committed to a possibly-more-abundant path: you chose to focus on the long term, and maybe you enjoyed some of it along the way. Maybe you found the perfect house for you, maybe you took that amazing vacation with your loved ones that you’d been dreaming of. You made your life happen along the way.

We invest for the long run; we spend for the long run too, so to speak. We don’t invest for a poorer future; we don’t spend beyond our means. (The road to broke is never worth it.) And, as always, you need to understand where your short-term money is—and keep it out of your long-term buckets.

We think the smart money is in investing for the best possible future. But we never know what the future may hold, so it does make some sense to hedge your bets. At 228 Main, we don’t tend to think of hedging investments in terms of bonds or gold or real estate—or any conventional option that sacrifices returns for Future You in order to pander to the fears of Current You.

Instead, you could continue investing for long-term growth and spend some money on the ultimate hedge: living your own best life.

Ready to talk about what this means for your portfolio? Call or write, anytime.


Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss.


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Thoughts about the Future, Reminiscing on the Past

When The Jetsons first aired, the idea of a robot maid or a flying car seemed too good to be true. In 2023, we have moving walkways, Roombas, and flying car prototypes. With the growth of green energy, could we live in Orbit City by 2062? Get more here.


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What Do the Happiest People Know about Spending?

Two cups of coffee with a leaf design in the foam.

No matter their savvy or experience level, most investors would probably agree that money is a means to an end. It’s not an end in itself. You could have all the cash and all the stock certificates in the world, but you can’t eat them or burn them for fuel. They make terribly inefficient insulation. They’re less fun than a deck of cards.

But when it comes to deploying our money to optimize pleasure, finding joy can be more of a challenge than you’d think. One reason? Psychologists call it the “hedonic treadmill”: our brains are so good at getting used to things that they will keep chasing new pleasures, new experiences, and the next thing that will bring us a boost.

In terms of our spending, this means that we get used to fancy new gadgets sooner than we think we will. Luxury goods lose their luster as fast as anything from the bargain bin.

The danger is that if we don’t notice that we’ve started running from one thing to the next, the costs mount and the returns on enjoyment diminish.

Consider how we make decisions the larger the ticket price gets: housing and transportation are huge outlays, and they make up sizeable portions of many household budgets.

Is the purpose of buying a new vehicle to replace a family car, to enjoy the everyday pleasure of being able to get reliably from point A to point B? Or is this “for fun,” for the joy of driving and being seen driving a particular make or model? If this is fun money, are you okay with the fun that might be given up, if the money goes toward this one decision?

It’s okay to deploy our discretionary spending however we see fit, but we might do well to remember something powerful: we shouldn’t underestimate how gratifying even the smallest of joys can be. In fact, sort of like the effects of compound interest, routine doses of fun can go much farther than those fewer, farther-between spending sprees.

This is why it’s vexing to hear a little treat like a latte get such a bad rap. As writer Laura Vanderkam explains, such “small, repeated pleasures” have the power to give life a lift, regularly. And better, even a lifetime of $3 lattes will not sink your longer-term goals the way that a $300,000 status symbol—like houses or cars truly beyond our means or needs—could.

So what do the happiest people know about spending? That if you want more of that proverbial bang for your buck, think more about the frequency than the size of life’s pleasures. The big stuff may be overrated, in that humans tend to overestimate the impact that large purchases will have on their happiness.

Tending more often to your joy and enjoyment as you spend? Now that sounds like a nice way to direct your time and money.

Want to talk more about how your money is working for you in your everyday life? Let’s visit, anytime.


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What Do the Happiest People Know about Spending? 228Main.com Presents: The Best of Leibman Financial Services

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A Wealth of Stuff

Our stuff is not the most important part of our financial planning, but it can certainly be part of it. As you look around at the things of your life, we hope that you see them as a reflection of and tool toward your goals—as part of a happier, healthier, and more sustainable financial future.


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