Year-End To Do's: Checking-in on IRA account contributions and withdrawals
Satisfying Your Required Minimum Distribution (RMDs)
If you are 73 or older and have a pre-tax retirement plan account such as a traditional IRA, SEP IRA, SIMPLE IRA, or an employer sponsored retirement plan, the IRS requires you to withdraw a minimum amount from this account – whether or not you need or want the funds. The distribution amount is known as your RMD, and it is determined by IRS standards on an annualized basis. Visit IRS.gov to review the in-depth criteria for individuals subject to RMDs.
It is important to note that to avoid a significant penalty you MUST take out the Required Minimum Distribution amount for 2025 by December 31st.
Inherited IRA account owners may also be subject to RMDs. Please keep in mind there are a distinct set of rules around inherited IRA’s. These rules are generally centered around who the IRA came from (spouse vs non-spouse) as well as the age gap between the deceased and inheritor in the case of non-spouse IRA’s. Given the different set of rules pertaining to inherited IRA’s, as well as a potential 25% penalty if not taken correctly, it is best to consult your Financial Advisor as well as a CPA to make sure you are adhering to IRS standards.
Using Qualified Charitable Distributions (QCDs) to manage the tax burden of an RMD
In the event that you do not need your RMD to supplement your annual income, you can use your RMD to make Qualified Charitable Distributions (QCDs) as non-taxable distributions. In 2025, the maximum amount an individual can donate directly to a charitable organization from their retirement plan account is $108,000. You must be at least 70.5 years old to make the QCD.
If lowering your taxable income for a given year is a priority for you, the use of a QCD could be a suitable option. A QCD enables you to gift all or a portion of your RMD directly to a qualifying charity and not pay any income taxes (up to $108,000) on the donated funds. If you opt to make a QCD, please keep in mind:
Your IRA custodian needs to send the funds directlyto the 501(c)3 on your behalf
-OR- if you have checks directly linked to your traditional IRA, please make sure to contact CWM to ensure funds are available (i.e. not invested) so that you can write a check and then make sure the charity deposits the check before the end of the year so it is attributed to the current tax year
Questions about your RMDs and potential QCDs?
The CWM Team has been in touch with clients regarding their RMDs for this year, however if you have questions about the status of your RMD or QCD, please contact us at (425) 778-6160 to connect with the Admin team.
IRA and Roth IRA Contributions
If you have an IRA or Roth IRA, maximum contributions for the 2025 tax year are1:
The maximum allowable IRA total contribution for your combined traditional and Roth IRAs is $7,000 – keep in mind your contribution limits could be less depending on income. Please consult with your CPA before making your contribution
You may be eligible to contribute to your Roth IRA using 529 rollover assets (traditional IRAs do not qualify for this option) - please consult with your CPA on your eligibility
Age 50+: Catch-up contributions may be made up to an additional $1,000 for a total of $8,000
When submitting your contributions:
Make checks payable to "Charles Schwab fbo [Your Name] - do NOT make your check payable to CWM
On the memo line of the check write "2025 IRA Contribution" - the CWM team will add the 8-digit account number upon receipt of the check before depositing the check on your behalf to your Schwab account
Contributions can be made retroactively up until the tax filing deadline in April 2026. For guaranteed deposit, we recommend making your contribution at least one week prior to April 15th
Contributions can be arranged to be made from your individual, joint, or trust account held at Schwab. If you are interested in this option, please call the office at (425) 778-6160 to speak with the Admin team
In addition to maximum contribution amounts increasing for IRAs and Roth IRAs, other tax-advantaged savings accounts have seen an increase in maximum contribution amounts2:
If you have additional questions or would like to connect with a CWM advisor, contact us at (425) 778-6160 or click here to schedule a conversation.
Comprehensive Wealth Management, LLC (CWM) is an SEC registered Investment Advisor and Pacific Northwest wealth management firm that partners with clients to articulate and help achieve their financial goals as prudently as possible. Our high-touch, client-focused investment planning and implementation makes us the first call for executives, business owners, and other thoughtful investors to help strengthen their financial health holistically and intentionally, managing risk while pursuing long-term gains.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money. Diversification and asset allocation do not ensure a profit or guarantee against loss. Past performance is no guarantee of future results. This communication is informational only and is not a solicitation for investment advice.
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