I’m sure you know what DIY
stands for, Do-It-Yourselfer. By now you
remember from previous posts that I like to tell real life stories about my
practice. This one happened this past
week and it relates to the idea of Doing Financial Planning by yourself.
I recently had called a
prospective client about rolling over his IRA to a managed account with
me. He had told me that the monies were
in CD’s at a local bank and that he also needed to begin withdrawing money from
it to satisfy his required minimum distribution. He told me the value of his account and also
what he calculated was his required
minimum distribution. I responded by
saying that seemed a bit too high and would he mind me checking that. He approved.
I not only went to my IRS
Tables but I also called an accountant I work with as part of my team. What did we find? The prospective client alone calculated he
needed to withdraw $25,262 each year.
The correct legal IRS amount was $15,033. WOW! I
saved the client $10,000 + but even more importantly approximately $3,000 in
taxes to Uncle Sam. The problem was he
was not using the correct table.
Please do yourself a favor. It’s great to make the decisions
yourself. In fact, I encourage it. But also talk to a professional to get some
ideas, some alternatives. The time you
do will be well spent.