Required minimum distribution planning when paychecks replace work: Tolleson Wealth Management

Nine years can make a forced withdrawal much larger

Leaving pre-tax money untouched until the IRS forces it out is the mistake that creates this problem. The IRS says RMDs begin at age 75 for people born in 1960 or later, and at 73 for earlier birth years. Assuming 5 percent annually for illustration, $1M left alone for nine years becomes about $1.55M. The IRS divisor then sets a withdrawal whether your guardrail paycheck needs it or not. This often affects households without a pension, living from a brokerage account while Social Security is delayed and most savings remain in 401(k)s and IRAs. Tolleson Wealth Management begins by estimating that first required withdrawal, not by admiring today’s balance.

Can two couples with $1.4M face different RMD choices?

Two retirees can hold the same $1.4M and need different required minimum distribution planning because account types, timing of Social Security and expected spending set the taxable withdrawal. Glenn and Monique have $1.1M in pre-tax accounts and lower-income years before Glenn starts Social Security at 70, so measured withdrawals can make sense; another 66-year-old with $900K in Roth and brokerage assets may be better served by waiting.

For illustration, Glenn and Monique are 66 and 64, with $1.4M split among two 401(k)s, an IRA and a brokerage account. They want about $7,500 monthly. Glenn holds $800K pre-tax, made up of a $550K 401(k) and a $250K IRA. Monique’s 401(k) holds $300K, while their brokerage account holds $300K. Left untouched at an assumed 5 percent annually, Glenn’s $800K becomes about $1.24M at age 75, nine years away: $800K × 1.551 = about $1.24M. His first RMD is about $50,400: $1.24M ÷ 24.6 = about $50,400.

That number matters beyond Glenn. If he dies at 77, Monique can roll his IRA into her own IRA, but she files as a single taxpayer from the year after his death. The IRS standard deduction for 2026 is $32,200 for married couples filing jointly and $16,100 for single filers on similar withdrawals. If the money later passes to their two children, each child receives half of the $1.24M, or $620K. Under the 10-year window, each child must empty that share within 10 years, about $62,000 annually before growth. A beneficiary form naming the estate, or one lost during an account merger, can override a will. While you are alive, fixing it takes a newly signed form for each account and written confirmation from the custodian; a 401(k) may also require a spouse’s written consent for a non-spouse beneficiary. After death, it cannot be undone, and a five-year rule can apply when the owner dies before reaching the required beginning date.

Tolleson Wealth Management sets Glenn and Monique’s $7,500 monthly pay first, then checks each year whether the RMD exceeds what the paycheck needs. When it does, the excess goes back into the brokerage account and is reinvested, so it does not become extra spending. A Roth conversion strategy is a separate tool that may reduce a pre-tax balance before RMD age. Quick test: grow the pre-tax balance to RMD age at a modest assumed rate and divide it by the IRS divisor, 26.5 at 73 or 24.6 at 75. If that result exceeds the amount your paycheck needs from those accounts, the RMD is likely to set taxable income, and the years beforehand deserve attention. The 5 percent figure is only an illustration. An account can also fall below what was invested, which shrinks the RMD but still leaves you deciding how withdrawals will support spending.

Do I still need my CPA if Tolleson Wealth Management runs the RMD numbers?

Yes. You sign beneficiary forms and decide what to spend; Tolleson Wealth Management projects each account’s RMD, chooses which IRA pays when IRA RMDs are combined, and times withdrawals against the guardrail paycheck. Your CPA sets withholding or estimated payments and reports qualified charitable distributions correctly on the return.

Your attorney checks that the will and any trust match beneficiary designations. The custodian calculates its own amount, makes the payment, withholds tax if directed, and confirms beneficiary changes. If most savings are already in Roth and taxable accounts, or projected RMDs sit below spending anyway, planning years ahead adds little. The firm does not prepare tax returns, so the CPA still files them and sets withholding.

Which questions reveal useful required minimum distribution planning?

A capable adviser should show the arithmetic for your first RMD, explain the payment rules account by account, and ask what happens to a surviving spouse and heirs. Required minimum distribution planning goes past a calendar reminder. Ask the adviser to tie each withdrawal to the tax reporting, the beneficiary paperwork and the amount you actually plan to spend.

• Will you project my first RMD at 73 or 75 using my balance and the IRS divisor, then show the arithmetic?
• How do you handle two 401(k)s that each must pay their own RMD, versus IRAs that can be totaled?
• When did you last compare my beneficiary forms with my will, and what did you find?
• What happens to my spouse’s taxes and my children’s 10-year window if I die first?

One Tolleson Wealth Management meeting turns four accounts into an RMD playbook

Bring the December 31 statement for each account, since that balance sets the next year’s RMD, plus the custodian’s beneficiary confirmation, your latest tax return and any trust paperwork. The meeting walks through each account’s first RMD year, whether a spouse rollover or qualified charitable distribution changes the picture, and which beneficiary forms need correction. You leave with a playbook line for every account, a short list of forms to sign, and a written explanation of how the firm is paid before you move an account.