retirement planning

RMD at Age 73: What’s Up with That?
By Mark Leibman, President

We have noticed that the rules about IRA account withdrawals can cause some confusion, particularly among those who are getting close to the “Required Minimum Distribution” age.

Here, we’d like to cover what the basics might mean for most people, though it is not intended to be advice or a recommendation for your specific situation.

For traditional or rollover IRA account owners, withdrawals after age 59½ are free of penalty, but income taxes must be paid on the amounts withdrawn. One may withdraw money or not, in accordance with their needs and plans.

But beginning at age 73, the rules change.

For each year beginning with the year you turn 73, a “Required Minimum Distribution” (RMD) must be withdrawn:

  • “Required” means there is no option about it—it must be done.
  • “Minimum” means that you must withdraw at least the calculated amount, though you may withdraw more if you choose.
  • “Distribution” is simply the word the IRS uses for withdrawals.

The way the numbers work, the RMD starts out at a little under 4% of the account balance at age 73. Then, the RMD rises gradually each year. The RMD gets to a little over 5% at age 80 and closer to 10% by age 92. The withdrawals will be taxable—that is the whole object of the exercise, from the IRS’s perspective.

Even with those requirements, IRA accounts may still have significant balances until advanced ages.

Here are just a few fine points:

  • The calculation begins with the prior year-end balance.
  • The factor used comes from an IRS table, and we can do the arithmetic for you.
  • The withdrawal may be made any time in the calendar year.
  • If you have multiple IRA accounts, it can get confusing. Some people consolidate and simplify their finances at this point.

For more information, the IRS explains more details about RMDs online, available here. Please also keep in mind that different rules apply to inherited IRAs, Roth IRAs, and certain other situations, so do seek specific advice for your situation as necessary.

As for our role, our object for each client is to help have your money do what you need it to do.

So the question of how you should manage your accounts and your withdrawal strategy is best answered in a one-on-one discussion. If you would like our help talking through your situation, please call or email us. Happy to help.

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.

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We Choose the Orchard!

We believe in saving for the future, but the present is where we live. Your retirement flow might go toward any mix of spending: cash for bills, a stash for unexpected events, or maybe it’s for that adventure in the Florida Keys! None of it takes a pile of money: instead, we tend the orchard for the fruit crop.

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The Organizing Question: Mark’s Role, New Clients, and More 
By Mark Leibman, President

What a journey thus far!

I started at the kitchen table. Bought the office building at 228 Main when I could neither afford it nor afford to pass it up. Struggled and juggled for years. Fit a snowbird lifestyle into the middle of it. Survived personal tragedy, a cruel disease that slowly took the life of my high school sweetheart.

And through it all, we grew. More and more people entrusted more and more wealth to our care. More and more teammates helped me hold up my end of the deal.

They say it is not the strongest or the smartest who survive and thrive, but those who adapt and adjust to change.

But then there are the things that are not changing.

I recently heard second-hand the misperception that “Mark Leibman is not taking new clients.” But from a business sense, Mark Leibman became Leibman Financial Services, Inc. (LFS), a long time ago. And LFS is definitely working with anyone who contacts us with an interest in what we’re doing in here. Everyone gets access to the same set of services. One story, one philosophy, one book of business.

And still, anyone with an internet connection can know what I, Mark, am thinking. Every client gets the impact of my ongoing obsession with the markets. And they get a lot more brainpower working for them than I personally possess.

I have always asked myself, and you, and my teammates, and our mentors this question: “What could we be doing differently or better?” The underlying object has always been to try to grow the buckets—and help people connect their money to their lives. Some of you tell us we have done it differently and better.

In an industry seemingly focused on getting new clients and finding new money, we aim all of our intentional efforts entirely at you, our clients. Don’t have time to chase “new money.” Not me, not my teammates.

Eliminating sales activity enables us to put investment research, portfolio management, and communicating with you at the center of our work. Many other investment advisors outsource all of that into model portfolios managed by others and buy canned communications, all so that they can go look for new customers.

Paradoxically (or not), when we stopped pursuing prospects, we began attracting more clients. People tend to like it a lot when their buckets grow.

These distinctions empowered our evolution into a different and better organization. We have many teammates, and ownership and management is now a four-person collaboration. But we still have one story, one philosophy, and one book of business. Many “financial advisor” shops, however, are like a collection of sole proprietors, each on the prowl for new business all the time.

We believe we are organized differently—and better.

At the beginning, Colonel Sanders cooked all the chicken. At the beginning, I did everything, too. The business has grown into something that no single person could operate on their own—not me, not Sanders, not any one of my three partners. It takes all of us.

All three of my partners have the credentials and experience to consult with clients, to take the lead when they are the best fit. Each of us brings the same philosophy, the same investment offerings based on the same research, to every client. Any client can call any one of us. I am still here to talk—and so are my partners.

And the whole enterprise rests on the same values and principles, the same herbs and spices that we started with.

Wondering what any of this means for you? Call me, or any one of them, any time.

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When Life’s Not a Straight Line

Sometimes life’s big milestones arrive in a neat, straight line. And sometimes that’s just not what happens—or what we want to happen. How do we plan for a swoopy life?

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What’s the Cake For?
They say you can’t have your cake and eat it, too… but what if your cake had the potential to grow over time? Who says you can’t snack when you’re hungry and still save some for later?

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We Are All Authors

Even heroes get knocked down a time or two when fighting their monsters. There may be a couple of bumps in the road, but what good plot doesn’t have some conflict? With our passions in mind, a little bit of perseverance, and a good plan, we all get to be the hero of our own story. Want to talk through what’s important in your story? Call or email to chat.

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Looking Back from 68 
by Mark Leibman, President

Fifty-six years ago, I got my first paper route.

Forty-seven years ago, my first license to work with financial products.

Thirty years ago, the beginnings of what became the enterprise that serves you today.

Looking back from age 68, I realize that delivering something of value for money was at the heart of that first entrepreneurial endeavor—and remains core to our work at 228 Main.

I’ll never forget the speaker I once heard at a business conference, the one who began with a visualization exercise. Exactly how much money did we want to be making three years from now, he wanted to know. He told us to write the number down and to look at it morning, noon, and night.

His second point was about the importance of being client-centered.

I thought, “Hmm. You can only be ‘centered’ on one thing, and this fellow is centered on money.” Then I walked out.

From the vantage point of my 68th birthday, I see the compounding miracle of being focused on your outcomes. The better off you are, the better off we are—it is a win-win situation. And who knows how that arrangement might continue to build between now and my retirement at age 92? (Only 24 more years to go until that retirement party!)

Some financial types pander to people’s fears, so that they can “save” their clients with right “solutions” (which often happen to be their own products and services). We have always sought to build your confidence to invest successfully, to grow your buckets. Fear shuts down our ability to think—which is one of the reasons positivity pays, in our opinion. If we can keep our heads while all about us are losing theirs, we are in a contest of wits with unarmed opponents.

I still can’t envision walking away from the best clients in the world. If it doesn’t feel like work, is it really a job? And my associates are the best teammates in the world. We’ve built an enterprise; our capabilities as a team are vastly greater than what I had to work with at the kitchen table, back in the last century.

Thank you all, for everything, to this point. Here’s to the next 24 years. That retirement party will be in May 2048, details to follow.

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Play the audio version of this post below:

Looking Back from 68 – 228Main.com Presents: The Best of Leibman Financial Services

This text can be found at https://www.228Main.com/.

Three People In One

There are at least three people involved in every decision you make: past you, present you, and future you! How well is the committee getting along? And who’s getting the final say?

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What Happens on the Research Team… Goes in Portfolios!

Clients, this week we’ve got a little behind the scenes tour: what happens in our in-house research process?

Here are some of the things we like to think about (so that you don’t have to!).

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The White-Knuckle Way

We can make flexibility a part of our lives and our financial planning. Our day-to-day is forever changing, and so it’s important to take some time to re-evaluate and make sure we are on track to get where we want to be. If our lives require a different plan, we make one! No one can white-knuckle their way to their dreams. 

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