I’m 68, single and retired. I started claiming Social Security at 65 and my house is paid off completely. I have two fixed annuities: one for $300,000 at 5.5%, due to mature in 2026, and one for $100,000 at 4.5%, due to mature in 2028. RMDs are looming in five years when I will be 73. I don't need the money as I have CDs, stocks and savings. What advice can you give me regarding the two annuities to minimize taxes and ways to possibly reinvest the money. Thank you for your help in this matter and keep up th ...

Core Insights - The article emphasizes the importance of getting financial affairs in order as 2025 comes to a close, particularly for retirees who need to consider their required minimum distributions (RMDs) before 2026 begins [1] Required Minimum Distributions (RMDs) - Individuals aged 73 or older with traditional retirement accounts must take RMDs, as mandated by the IRS to prevent tax-advantaged wealth transfer [3] - The first RMD is due by April 1 of the year following the individual’s 73rd birthday, while subsequent RMDs must be taken by December 31 of each year [4] - Failure to take the required distribution can result in a 25% penalty on the amount that should have been withdrawn, which may be reduced to 10% if corrected promptly [4] Calculating RMDs - RMDs are calculated based on the account balance and life expectancy, with financial institutions typically providing this calculation [5] Managing RMDs - For retirees who do not need their RMDs, these distributions can create an immediate tax burden [6] - One strategy for managing RMDs is to utilize a qualified charitable distribution (QCD), which allows funds to be transferred directly to a charity, satisfying the RMD requirement while excluding the amount from taxable income [7] - Alternatively, retirees can take their RMD and reinvest it in a traditional brokerage account or other investment vehicles, although taxes will still apply to the distribution [8]