BRH wrote:
- quote -

Yes, each would send you a notice and you'd need to total the 8 to
determine your minimum required distribution for the year. This isn't
too hard really, you just tally up the account values as of Dec 31 of
the prior year, and divide that number by an age-based factor that's
printed in the IRS publication about this (see Pub 590 at www.irs.gov).
And this doesn't start until you reach age 70 1/2, before that there
aren't any minimum required distributions.

But you won't need to take a distribution from each account. All that's
required is you meet the MRD requirement somewhere, through some
combination of withdrawals. You could, say, keep a bank CD as one of
your IRA accounts, and take your distributions from there each year,
while leaving the other 7 accounts alone. The IRS doesn't care, and your
mutual fund custodians shouldn't either.

-Tad

Tad Borek wrote:

- quote -

I have one last question. If I continue having 8 traditional IRA
accounts (with multiple mutual fund providers), when the time comes for
minimal distribution they will _each_ do their own calculation, no?
After all, they're not aware of the other accounts. I would prefer keep
track of fewer than 8 minimal distributions. Or am I missing something
in this analysis?

Thanks!

BreadWithSpam[at]fractious.net wrote:
- quote -

enough to have a safe, sizable pension puts me in a "not the usual case"
category. Without the pension, a more conservative mix would definitely
be called for.

To get a more specific analysis, I'd have to divulge my total financial
picture here, which I won't do (of course).

Thanks for your perspective on this.


======================================= MODERATOR'S COMMENT:
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BRH wrote:
- quote -

BRH-
The thing to remember about rules of thumb is that they're generalities
that "on average" make sense, but not much more. It is commonly said
that your investment mix should become more conservative as you approach
retirement, and it does make sense - at the very least, to the extent
you anticipate tapping into those investments, you don't want those
dollars invested in pork bellies.

But consider your individual situation. Maybe you have a paid-off home
and you'll get more money out of your pension than you need to cover
expenses - be a "net saver" during retirement. Or maybe that's the case
once you factor in even a small amount of dividend income from your
accessible holdings.

If so then you might be retired but justifiably have a relatively
aggressive investment allocation, because the dollars are likely to sit
there for 15 years (or "forever").

Another exception comes when someone has reached true financial
security, where their investments (plus pension, perhaps) are more or
less guaranteed to cover the anticipated income needs over retirement.
In that case the asset allocation may come down to personal preferences.
100% T-bills, 100% stocks, whatever.


- quote -

If there's a reason not to consolidate, this wouldn't be it.

From the IRS perspective, you have just one traditional IRA, which
might happen to be spread out over 8 accounts. Your "nondeductible
contributions," which will be factored into your taxes at distribution
time, or in a Roth conversion, aren't specific to any one account. If
these contributions were $4k in one account, $2k in another, $1k in
another, you have $7k in nondeductible contributions or "IRA basis" in
your IRA. That number is sitting on a tax form that you've filed each
year you made a nondeductible contribution. But it's irrelevant what
specific IRA account the contribution went into. And at distribution
time, you don't pay attention to specific account values and IRA basis.
If you take out $1k it's treated the same tax-wise regardless of whether
you get it from an account that included nondeductible contributions.

One comment on your asset allocation: when dividing your investment
allocation across the IRAs, there's an argument for putting your highest
expected return investments in the Roth, where the gains are free from
tax, instead of the traditional IRA, where they will be taxed.

Also: it sounds like you know this but you can't combine Roth IRA assets
with any of your pre-tax IRAs, they're completely different types of
accounts.


- quote -

It's not so bad really, just be sure you have a total of the
nondeductible contributions to the IRAs - not per account, but the
bottom line total. That's about all you need to keep track of.
Eventually (age 70 1/2), you'll need to meet minimum-distribution
requirements on the trad-IRAs, but there isn't any record keeping there
either - you base them on the total IRA value Dec 31, and the custodian
needs to report it to you anyway. And a contributory Roth doesn't
really have any recordkeeping associated with it. So recordkeeping isn't
going to be all that complicated either way. I think the main advantages
in consolidation are simplifying investment management, and avoiding
fees for smaller accounts.

-Tad

"noreplysoccer[at]hotmail.com" <noreplysoccer[at]hotmail.com> writes:
- quote -

His point in that question, though, is that his nominal assets
are distributed that way - excluding any imputed value of his
pension. If he's got a pension paying him, say, $40k/yr pretty
much guaranteed (I'm making up a number here, I have no idea
what 60% of his salary is), he may consider that pension to
imply the equivalent of, say, another $1million in bonds.
Now, supposing that his 70/20/10 adds up to another million,
his real, effective allocation is not 70/20/10, but more like
35/60/5 - a fairly conservative picture.

Now, whether his pension ought to be considered the equivalent
of bonds, and how much that pension is "worth" in terms of
current assets, those are issues to be explored in more detail.



--
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Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

"When factoring in non-retirement investmts the allocation of my total
present funds is as follows: Bonds - 19%; Equities - 70%; Cash - 11 %
(Yes, my funds are heavily weighted towards the regular IRA's due to
having started those investments earliest.)


Much of what Ive read about preparing for retirement says that someone
like me with only a few years to go to retirement should adjust their
asset allocation to lower risk. I've also been told that, since I'll
have a good (federal) pension income that shouldn't be going away (like

a private pension might), I can have take more risk in my investments
than what's usually recommended. Based on these 2 somewhat
conflicting
statements, is my mix too conservative? "

I do not think 70% equities, 20% bonds and 10% cash is "too
conservative" under too many definitions. Considering how clse you are
too retirement, I think more people will tell you to decrease the
stock/equity exposure rather than increase it.

a couple of thoughts- is 10% cash more or less than 4 years worth of
basic living expenses? I might suggest having enough cash "on hand" in
CDs, money markets or savings accounts to allow you to live comfortably
for 4 years. This way if the market turns 70% equities into 50%
equities, you do not have to draw down investments which are poised for
a rebound.

the 60% pension- is it enough to live on?

what are your retirement plans (travel, spoil the granschildren, start
a new business...)

I'm within 3 years of the date that I will retire (at age 55) from a
federal job. Upon retirement, I will start receiving a good pension -
about 60% of present salary. I have contributed the max to the 401K
(Thrift Savings plan) and have almost always maxed out my IRA
contributions every year. Although I think that I'll be in good
financial shape upon retirement, I have 2 basic questions.

The first involves asset allocation. Right now the allocations of what
I consider to be my retirement funds (all mutual funds) are:

Bonds Equities Cash
Federal Thrift Savings (410k)= 46% 54%
Regular (Non-Roth) IRA's = 1% 98% 1%
Roth IRA's = 45% 55%

Other (non-IRA) Investmts = 78% 15% 7%

When factoring in non-retirement investmts the allocation of my total
present funds is as follows: Bonds - 19%; Equities - 70%; Cash - 11 %
(Yes, my funds are heavily weighted towards the regular IRA's due to
having started those investments earliest.)

Much of what Ive read about preparing for retirement says that someone
like me with only a few years to go to retirement should adjust their
asset allocation to lower risk. I've also been told that, since I'll
have a good (federal) pension income that shouldn't be going away (like
a private pension might), I can have take more risk in my investments
than what's usually recommended. Based on these 2 somewhat conflicting
statements, is my mix too conservative?

Second Question: Whether my overall mix is too conservative or not, I
want to consolidate a number of my IRA accounts, to simplify
record-keeping. I have a total of 2 Roths and 8 Non-Roth accounts. I
know that combining Roth and non-Roth is not a good idea. So, I'm
considering consolidating the 8 non-Roth's into perhaps 3 accounts, and
consolidating the 2 Roth's into one. The problem is that some of the
contributions to the non-Roth's were non-deductible. (Deductibility had
income limitations in some years, which I exceeded.) Would I be
creating a tax-record keeping problem by combining any of the accounts
that have some non-deductible contributions with accounts whose
contributions had been fully-deductible?

As you can see, I diligently contributed to retirement accounts for many
years. However, it seems that I may have inadvertently created an
accounting nightmare. I want to simplify my portfolio for the
"withdrawal" phase of my financial life that will begin in about 7 years
(when I hit 60). Any thought/suggestions on the best way to go about
this would be appreciated.

Thanks, and sorry for the long post.