MANILA, June 27 — A retiree named Robert, already past age 70.5, called into The Clark Howard Show with a problem many older savers across Asia would recognise: the IRS was forcing him to withdraw money from his retirement accounts, even though he didn’t need a single peso of it for daily expenses. Robert was splitting his required minimum distribution across three separate accounts, holding roughly $500,000 in total.
He wanted to know what to do with money the government demanded he pull out, but that he had no use for right now. Clark Howard’s answer was direct.
He told Robert that if he didn’t want to give the money to family or charity, and didn’t need it for himself, he should put it into an investment account. Specifically, Howard suggested buying something like a total stock market index fund, describing it as a great inheritance asset for someone down the road. For families across the Philippines and the wider region, where remittances and retirement savings often cross borders, this question hits close to home.
Many overseas Filipino workers and their relatives face similar dilemmas — being forced to move money they don’t yet need, simply because of age-based rules. The broadcast that carried this exchange aired on February 7, 2018.
But the underlying issue hasn’t aged. For retirees in Robert’s position, the core mechanic is straightforward: an RMD you don’t need should go back to work rather than sit idle and lose value to inflation. Howard’s instinct was correct in principle.
Money that isn’t needed for living expenses should be reinvested rather than parked in a checking account where it slowly erodes in purchasing power. For communities across Asia where every retirement peso counts, that distinction matters deeply. But the advice came with what one veteran retirement-income planner described as a giant blind spot — a gap that costs retirees thousands every year.
The specific mechanic Robert needed to understand, the one that could make the difference between preserving wealth and watching it leak away, was not fully addressed in that short on-air exchange. For ordinary people across the region, the lesson is practical.
When the government forces you to take money out of tax-advantaged retirement accounts, the decision of where that money goes next is just as important as the decision to save it in the first place. A stock index fund may be better than a checking account, but the full picture involves understanding how different types of accounts interact with taxes and inheritance. What Robert’s call illustrates, for families from Manila to Singapore to Hong Kong, is that retirement planning doesn’t end when the withdrawals begin.
The way you handle money you’re forced to take out — but don’t need to spend — can shape what you leave behind for the next generation. That’s a question worth asking long before the IRS sends its first notice.
