The Fiscal Physical Retirement Podcast
Smart Retirement Planning. Straightforward Advice.
Welcome to The Fiscal Physical Retirement Podcast, the show built for professionals and pre-retirees who want clarity, confidence, and control over their financial future. Hosted by Aaron Hoisington and retirement planner Ryan Nelson, founder of Alchemy Wealth Management and author of Your Fiscal Physical, this podcast delivers practical advice, expert insights, and real conversations about retirement readiness, tax-efficient investing, and long-term wealth strategies.
Whether you're five years from retirement or just starting to get serious about your financial goals, each episode simplifies complex financial topics into clear, actionable steps. No jargon. No fear. Just the guidance you need from a trusted financial advisor serving Nevada and beyond.
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The Fiscal Physical Retirement Podcast
Required Minimum Distributions (RMDs) Explained
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He also covers the inherited IRA 10-year rule, which can catch heirs off guard if they are in their peak earning years when they inherit the account. If you have been building tax-deferred savings for decades, this episode helps you understand what the IRS will eventually require and why planning ahead matters. This episode covers general tax concepts; please consult your CPA or tax advisor for guidance specific to your situation.
Find "Your Fiscal Physical" the book on Amazon
If you have suggestions or feedback, please email us at: Podcast@AlchemyWealth.com
And, as always, Stay the Course!
Understanding Required Minimum Distributions
Speaker 1Welcome to the Fiscal Physical Podcast . Join us each week as we sit down with the founder of Alchemy Wealth Management and author of your Fiscal Physical , Ryan Nelson . Tune in to gain valuable insights and practical tips as we simplify complex financial concepts into digestible lessons . From budgeting to retirement planning , this podcast is your go-to resource for mastering financial literacy .
Aaron HoisingtonWelcome to this week's episode of the Fiscal Physical Podcast . My name is Aaron . I am joined , as always , by the knowledgeable Ryan Nelson of Alchemy Wealth Management the founder of Alchemy Wealth Management , if you will . Connoisseur of beef , jerky and wine and all things triathlon .
Ryan NelsonHow are you doing today , Ryan ? I am doing well .
Aaron HoisingtonHow are you doing , aaron ? I am doing pretty solid . I would say it's a beautiful day out . It's a great day to increase your financial literacy . That's what I think . So we'll go ahead and dive in on this week's episode , this one . If you've listened to the last few episodes , we've talked a lot about the tax , different tax system or , sorry , the US progressive tax system . We've talked about the capital gains tax . We've talked about gift and estate tax . Please go back and listen to those episodes if you want . You're going to learn something for sure . So we're going to switch gears a little bit here with talking about RDMs not to be confused with RPMs , but RDMs required minimum distributions , rmds , all right , rmds . So I'm off to a roaring start with this one here . So , ryan , why don't you break that down before I put my foot in my mouth again ?
Aaron Hoisingtonhere , what are required minimum distributions ?
Ryan NelsonYeah . So I think the best way of thinking about this is you know , so , maybe I've been saving money in my 401k , and if we reference back to some of those earlier episodes we had talking about Roth IRAs and traditional IRAs , right , we would remember that all the money we put in our 401ks are what we call tax deferred , so we avoided paying taxes on the money we put in , and we pay taxes when we pull the money out , right , right ? So now let's think about me . Maybe I've been contributing to a 401k over the last 30 years . I'm nearing retirement . I have all this money Could be millions and millions of dollars in a 401k or IRAs , and it's possible that I've never paid a penny of taxes on any of this money , and so the government's just kind of sitting back waiting for you to pull this money out , to start paying you know , start taking money out and paying the taxes on it , right , um ?
Ryan Nelsonbut maybe you get to retirement and you have a pension and you have some Roth IRAs saved up as well , and so you just start living on your pension and your Roth IRAs and and you're like gosh , I really don't need to spend any of this money in my 401k , right ? Well , when's the IRS going to get their tax revenue right ? And so the way I think about this is is the IRS can require you to take money out of one of these accounts . By taking money out , it creates a taxable event and therefore generates tax revenue for the IRS . So I think the way I think of RMDs is I think of it as a tool that the IRS has to create taxable events and generate tax revenue . So there's a couple different ways you can qualify for required minimum distributions , but again , ultimately the tool itself is just a requirement that forces you to take money out of an account that creates a taxable event , and so it's just a way that you can't sit on these 401ks forever and never pay any taxes on them .
Aaron HoisingtonRight , and we've mentioned in previous episodes about how the IRS and the government overall was very good at getting their money for taxes . They will definitely make sure that this happens here . At some point you will be paying taxes on that in a way , absolutely , and with RMDs , what's the age limit ? Because if we harken back to when we did the Roth IRA conversation I believe that was I don't know , if there's , what's the difference between the two ? Is there a difference between the age on when you have to start withdrawing from a regular IRA or a 401k versus a Roth ?
Ryan NelsonYeah , so for these required minimum distributions , they're really going to apply to traditional IRAs , sep IRAs , simple IRAs , 401ks , 457s it's going to be those , what we call those tax-deferred accounts . Oh , gotcha . And so again , it's that tool to make sure they can get their money out . So there's two different ways you can qualify to have to take an RMD . The most common one is age-related . That age keeps increasing , but right now it's age 72 . For people who are a little bit younger , right now it's going to be 73 for them , but we'll just run with . For this episode we'll say 72 . So what that ?
Ryan Nelsonmeans is if somebody is 70 years old right now , never touched their 401k , no harm , no foul . 71 , no big deal . The year in which they turn 72 , they'll have their first required minimum distribution . They'll be forced to take money out of their account again creating that taxable event and pay taxes on that amount . So that year right now is 72 . Again , for some people who are younger , it will be 73 by the time they get to that age and then and who knows how many times it'll change even before they get there as well right , sure Right .
Aaron HoisingtonWith anything , I mean listening to this podcast . If you listen to it in two weeks , something we might've said here might be outdated .
Speaker 1Like I know that you mentioned that in your book .
Aaron HoisingtonYou're like it's so hard to write like a , like a , or give information like this , because what you're saying right now could change next week with legislation or something that comes up , that that now it's different . Sorry , Yep , Yep , Exactly Right . So with , with RMDs , right ? What would you say is sorry ? Is there a best way to think about this ? Is there a tax or an amount that you does ? It depend on how much you have in that 401k that you have to pull out ? Yeah , I really stumbled my way through that , but hopefully you got there .
Ryan NelsonYeah , so what's going to be required is they're going to require the IRS is going to require you to take a percentage out . Okay , gotcha , and that percentage is actually a formula . You have to kind of calculate your percentage each year . And so if somebody had $100,000 or $1 million in their 401k and they hit 72 , and they have to start taking money out , it's going to be how much money they have to take out is dependent on , effectively , their Really what it's going to come down to is their life expectancy . So the IRS publishes some tables every year and they say so for a 72-year-old . They have a long time until they would be required .
Ryan NelsonIn theory , they could live a lot more years , and so the percentage they have to take out could be a fairly small percent , it may just be a couple of percent . As they start aging up 80 , they're going to have to start taking a larger percentage out every year . If they're in their 90s , even a larger percentage . If they reach 100 , they're going to have to take out even more . If they reach 110% , I think , the factor is like two , which means you have to take your account , balance and divide by two . So it's effectively 50% , if I remember right . I think that it gets up that steep . But , granted , if you're living to 110 , you're up there in age . That's certainly not common .
Ryan NelsonThat's a pretty old person , yeah , but so the RMD itself is again after you go through this exercise with the IRS , it effectively is going to be based on your age and your account balance . So the bigger your account balance so the bigger your account balance is , the larger your RMD will be . And the older you are , the larger your .
Aaron HoisingtonRMD will be Gotcha and that's good to think about . I mean , I like to think with this podcast there's something for everybody and that you can kind of take from it . And it might not be that right now you might not have and might not even be close . Like I said , I'm 33 years old . Like an RMD for myself , like several , several decades ahead of me , but just kind of being prepared , like to think about I can't just sit on this money forever , Like at some point you will have to pay those taxes on it one way or another , and making sure that that's done .
Ryan NelsonYep . And so as a 30 year old , yeah , you might still have a ways until you get to age 70 and are forced to take these kind of more traditional RMDs . There is a second way , though , you may have to take an RMD , and that would be through the inheritance of one of these types of accounts . So if you were to inherit a retirement account from somebody else , again , if you think about this , maybe your father has saved all this money in this retirement account , never paid taxes on it , passes it to you In theory . Now it could go the whole rest of your life without you ever paying taxes , right ? And so the IRS is set up , where they're not going to allow you to just wait your entire life , or even wait until you're 70 .
Ryan NelsonThe legislation around this has changed relatively recently , and they've now implemented what's called a 10-year rule . So if you were to receive a lump sum in retirement funds of family members or something , you could either just take it all at once and pay all the taxes in a single year , or you could choose to stretch that tax burden out over a 10-year window where you take a little bit out of the account every year for 10 years and at the end of 10 years the account would be empty . But so that would also be what we would call a required minimum distribution . So the IRS would be requiring you to take money out of your inherited IRA , and then again it would need to be empty in 10 years . And so again , it's really to be empty in 10 years . And so again , just again , it's really .
Ryan NelsonThe tool itself is the same . It's a requirement for you to take withdrawals from a retirement account that generates a revenue for the IRS . Um and again , it can make kind of make sense If you think about it . Whether you hit a certain age it's probably about that time that the IRS starts getting their revenue right or if you're inheriting it from somebody else , well , it probably wouldn't make sense for the IRS to let you just sit on that until you hit age 70 . So you'd have in this case , if you chose to use this method , you'd have a 10-year window to take all the distributions out .
Aaron HoisingtonAwesome . I'm so glad you brought that up too , because in my head I was like oh well , I don't have to worry about this till I'm 72 . But that's definitely not Everybody
Estate Planning and Financial Inheritance
Aaron Hoisingtonwill . Normally the idea that somebody has a parent or a relative that might pass that on and inherit it it could happen sooner than you think Absolutely , and being aware of and being knowledgeable that like , hey , at some point I will have to pull out this money because I got this here , so that was great yeah .
Ryan NelsonAnd I think it's an important part of estate planning as well . So let's say you start building a nice sizable net worth , right , and you say , okay , I'm going to start leaving money to my son , right . And so maybe at the time you pass away , it could be in your son's peak earning years , right ? Typically , it wouldn't be uncommon for , when a father passes away , to be in the son's peak earning years . And so if you leave your son this big sum of money that that he's going to receive during his peak earnings years , and he has 10 years to take all the money out and pay the taxes on , you might be passing it to him at a point in time where he's already earning a decent chunk of change .
Ryan NelsonNow , if you pass him , say , a million bucks this is rough math he might have to take $100,000 out a year for 10 years , assuming no growth , and so he might already be in a high tax bracket . So the money you're passing to him might be taxed at higher brackets than if you would just start taking the money out in your lifetime . So it's also an important planning concept to be thinking about as you're leaving the money , not only as you potentially receive inheritance from somebody else , but also , as you're planning to pass your inheritance , how is that going to affect the people you're planning to pass it to ? To pass your inheritance .
Aaron Hoisingtonhow is that going to affect the people you're planning to pass it to ? Yeah , no , that is phenomenal , man .
Aaron Hoisingtonjust to think about it , I mean , we could do a whole we're probably going to do a whole episode on estate planning or multiple episodes on it , because I think that that's incredibly important to think about . You know , when you're , how that passes down and what might be the best way to plan for these instances . Like , is it better to take it out now because I know that I'm approaching the end of my life and I just have to get all my affairs in order , or is it better to , you know , just wait and see , kind of approach there . So excellent , Well , that is great , Ryan . I appreciate the insight there on RMDs . Finally nailed that one here . So looking forward to building on that in the future with future episodes and just seeing kind of how this all works out . So we'll go ahead and take a pause here and we'll be back on the other side with some personal stuff . Hang tight .
Speaker 1And now to put the personal in personal finance .
Aaron HoisingtonWelcome back to the Fiscal Physical Podcast . We are in our personal section here , and last week , ryan , you asked me a trivia question , which was excellent . I love that and it really got my juices flowing . So I got , I researched one here and I'm pretty excited to to ask you this here . So let's hear it in a seven day period a week ? Okay , worldwide . How many hamburgers does mcdonald's sell ? Jeez , yeah , worldwide , seven day period a week . On average , obviously it's going to vary a little , sure ? How many hamburgers does mcdonald's sell ?
Ryan Nelsonworldwide . I don't even know how to even think about that , but um , I'll say it's got to be it's an interesting one there's .
Aaron HoisingtonReally . I was thinking I was like well , how would you even like it's got to be . It's an interesting one there's . Really I was thinking I was like well , how would you even like think about getting like a reasonable guess . Yeah , I'll say 2 million 2 million 45 million hamburgers per week yeah , that's crazy . On average are sold by McDonald's . What ?
Ryan Nelsonis that 2.5 billion ?
Aaron HoisingtonOr a year . I've done that . I haven't equated it over a year , but I was like , wait , that's like 6.5 million a week , yeah , that's crazy . Or every day they get sold .
Ryan NelsonThat's insane .
Aaron HoisingtonAnd it made me think I was like . I can't remember the last time I went to McDonald's , by the way , either , and I was like man , somebody's out there buying hamburgers . There's a lot of people out there buying a lot of hamburgers A lot of burgers being sold and I was like , oh my gosh , thinking about that . It's just an unfathomable number to me to think about 45 million or 44 million hamburgers every week being churned out .
Speaker 1So yeah , that's a lot of cows .
Aaron HoisingtonThat's insane , that's crazy . But anyway , hopefully the listeners were posed to guess as well too , and we'll see if you were anywhere close . But awesome , ryan . Well , I appreciate it . As always , we appreciate the listeners . Please check us out on all the different platforms Spotify , apple Podcasts , pretty much . Wherever you get your podcasts , you're going to be able to find the Fiscal Physical . We drop episodes every week every tuesday , you know . Please rate , subscribe , send us your feedback at podcasts , at alchemywealthcom , and we look forward to , uh , to bringing more content in the future and , uh , I'll , uh , I'll , uh , let you , let you , play us out here , ryan awesome .
Ryan NelsonYeah , thanks so much and , as always , stay the course thank you for joining us for the fiscal physical podcast .
Speaker 1Until next time , Happy listening and , as always , stay the course . If you have a question or topic suggestions , please email us at podcast at alchemy wealthcom . If you enjoyed today's discussion , subscribe to the podcast to ensure you never miss an episode , and consider leaving us a rating and review on your favorite platform . This helps other listeners like you find the show . For more resources , you can visit Alchemy Wealth Management's website at wwwalchemywealthcom or find your fiscal physical the book on Amazon . We'd be remiss if we didn't mention that personal finance is just that personal . Please don't take anything we say as advice . The preceding content is for informational and entertainment purposes only . It's not an offer or a solicitation , nor should it be construed or relied upon for tax , legal or investment advice . It doesn't consider your personal financial situation or objectives and may not be suitable for you .
