When presenting a particular section of our training manual, I usually make the joke that, “if we were playing an acronym drinking game, we would all be on our way to a hangover.” The segment is titled: “Missed stretch IRA RMD by an EDB, when the IRA owner dies before the RBD.” This part of the manual discusses the automatic waiver of the missed RMD penalty in a certain situation, and the acronym soup is borderline comical. So that everyone knows which end is up, here is a spiked punch bowl of common retirement-account-related acronyms.
IRA: Individual retirement arrangement. (Not “account!”)
RMD: Required minimum distribution. Minimum amount that must be withdrawn from a retirement account each year after reaching a certain age.
RBD: Required beginning date (for starting RMDs). Generally, April 1 of the year after the year a person turns 73.
QLAC: Qualifying longevity annuity contract. An annuity whose value (up to $200,000) can be excluded from an IRA owner’s balance for RMD calculation purposes.
EDB: Eligible designated beneficiary. Category of beneficiary who may take stretch RMDs.
NEDB: Non eligible designated beneficiary. Category of beneficiary who gets the 10-year rule.
NDB: Non designated beneficiary. Category of beneficiary that includes “non-people,” like an estate or charity. Payout rules applicable to NEDBs are the 5-year rule or “ghost rule.”
ALAR: At least as rapidly. The rule dictating that when RMDs have begun, they must be continued by the beneficiary. ALAR is a function of frequency, not amount.
QCD: Qualified charitable distribution. A distribution from an IRA to a qualified charity, subject to an age requirement of 70 ½ or older.
CWA: Contemporaneous written acknowledgement. This is just a receipt for your QCD!
CGA: Charitable gift annuity. A one-time QCD of $53,000 (for 2024) can go to an entity like a CGA, CRAT (charitable remainder annuity trust), or CRUT (charitable remainder unitrust).
DAF: Donor advised fund. A QCD cannot be made to a DAF.
NUA: Net unrealized appreciation. Tax strategy used to pay long term capital gains on the appreciation of company stock. (Be sure to know all the NUA rules before proceeding.)
NIA: Net income attributable. The gain or loss on an excess IRA contribution.
QDRO: Qualified domestic relations order. Used to split a retirement plan after divorce.
SECURE Act: Setting Every Community Up for Retirement Enhancement Act.
I feel dizzy. Maybe I should go lie down and sleep it off.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Specializing in private wealth management, we provide education, guidance, and strategies to help you achieve a tax-efficient retirement income.
Investment advisory services offered through Donato Wealth Management, PLLC, dba Empower Wealth Management and Empower Wealth & Tax (“Empower Wealth Management” or “EWM”),
an SEC registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
The information presented is believed to be current. It should not be viewed as personalized investment advice. All expressions of opinion reflect the judgment of the authors on the date of publication and may change in response to market conditions. You should consult with a professional adviser before implementing any strategies discussed. Content should not be viewed as an offer to buy or sell any of the securities mentioned, or as legal or tax advice. You should always consult an attorney or tax professional regarding your specific legal or tax situation. Personal investment advice can only be rendered after the engagement of EWM, execution of required documentation, and receipt of required disclosures. All investment and insurance strategies have the potential for profit or loss. Asset allocation and diversification will not necessarily improve an investor’s returns and cannot eliminate the risk of investment losses. Past performance is no guarantee of future results. For more information, please go to https://adviserinfo.sec.gov and search by our firm name or by our CRD #305031.
Insurance products and tax services are offered through Senior Tax and Insurance Advisors, PLLC, dba Empower Wealth Group (“Empower Wealth Group” or “EWG”). Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products offered through EWM. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. EWG is not affiliated with or endorsed by the U.S. Government, Social Security Administration, nor the federal Medicare program. You may be contacted by a licensed insurance agent. Calling the number above will direct you to a licensed insurance agent. EWG may not offer every plan available in your area. Any information provided is limited to plans available in your area. Please contact Medicare.gov or 1-800-MEDICARE.
EWM and EWG are both affiliated companies of Empower Wealth, LLC (“Empower”). Investment adviser representatives of EWM may have a financial incentive to recommend tax and insurance products and/or services offered through EWG which presents a conflict of interest. This conflict is addressed by EWM’s adoption of its Code of Ethics, which requires that all EWM’s Associated Persons place the interest of clients ahead of their own. Clients of EWM are also free to choose their own tax and/or insurance professionals and are under no obligation to utilize the services offered through any related entities or persons associated with Empower.
Strategic Partners listed on this page are not employees of EWM and are not affiliated through common ownership.
We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.
© Empower Wealth Management All Rights Reserved.
