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Mar

2025

What Is a Bull Put Credit Spread? Definition and Example

By Colin Dodds | Growing Wealth, invest, Investing | Comments Off

Editor's Note: Options are not suitable for all investors. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Please see the Characteristics and Risks of Standardized Options.

The bull put credit spread, also referred to as bull put spread or short put credit spread, is an options trading strategy designed to benefit from moderately bullish market sentiment.

In a bull put credit spread, an investor buys one put option and sells another at a higher price. Each put option has the same underlying security and the same expiration date, but a different strike (exercise) price. The strategy has limited upside and downside potential.

Investors employing a bull put credit spread receive a net credit from the difference in option premiums. The strategy seeks to profit from a modest increase in price of the underlying asset before the expiration date. The trade will also benefit primarily from time decay and, to a lesser extent, from a decline in implied volatility.

Key Points

• A bull put credit spread provides opportunities in a bullish or neutral market, where the underlying asset is expected to rise or stay stable.

• This strategy involves selling a put option at a higher strike price and buying one at a lower strike price.

• The maximum potential loss is higher than the maximum potential gain in a bull put credit spread.

• A bull put credit spread benefits from time decay as the expiration date approaches.

• Limited risk and reward define the bull put credit spread, making it suitable for cautious traders.

How a Bull Put Credit Spread Works

In a bull put credit spread, the investor uses put options. Put options give the buyer the right – but not the obligation – to sell a security at a specified price during a set period of time. They’re typically used by investors who believe the price of an underlying security will go down.

In a bull credit spread, however, the strategy is structured for investors who expect the underlying stock’s price to rise or remain above a certain level before the option expires.

To construct a bull put credit spread, a trader sells a put option at a given strike price and expiration date, receiving the premium (a credit) for the sale. This option is known as the short leg because the trader sells it, collecting a premium upfront.

At the same time, the trader buys a put option at a lower strike price, paying a premium. This option is called the long leg. The premium for the long leg put option will always be less than the short leg, since the lower strike put is further out-of-the money. Thus, the trader receives a net credit for setting up the trade.

The difference between the strike prices of the two sets of options is known as the “spread,” giving the strategy its name. The “credit” in the name comes from the fact that the trader receives a net premium upfront.

Profiting from a Bull Put Credit Spread

In a properly executed bull put credit spread strategy, as long as the value of the underlying security remains above a certain level, the strategy can produce a profit as the difference in value between the two sets of options diminish. This reduction in the “spread” between the two put options reflects time decay, a dynamic by which the value of an options contract declines as that contract grows closer to its expiration date.

The “bull” in the name of this strategy reflects the investor’s expectation that the value of the underlying security will remain above the short put strike price before the option expires. Although higher asset prices may improve the probability of maximum profit, the potential gain is capped at the net credit received. If the price of the underlying security drops under the long-put strike price, then the options trader can lose money on the strategy.

Recommended: How to Trade Options

Maximum Gain, Loss, and Break-Even of a Bull Put Credit Spread

Investors in a bull put credit spread strategy make money when the value of the underlying security of the options goes up, but the trade comes with limited loss and gain potential. The short put gives the investor a credit, but caps the potential upside of the trade. And the purpose of the long put position — which the investor purchases — protects against loss.

The maximum gain on a bull put credit spread will be obtained when the price of the underlying security remains at or above the higher strike price of the short put. In this case, both put options are out-of-the-money, and expire worthless, so the trader keeps the full net premium received when the trade was initiated.

The maximum loss will be reached when the price of the underlying security falls below the strike price of the long put (lower strike). Both put options would be in-the-money, and the loss (at expiration) will be equal to the spread (the difference in the two strike prices) less the net premium received.

The breakeven point for the strategy is calculated by subtracting the net premium received upfront from the strike price of the short put. This represents the price level at which the investor neither gains or loses money.

Example of a Bull Put Credit Spread

Here’s an example of how trading a bull put credit spread can work:

Let’s say a qualified investor thinks that the price of a stock may increase modestly or hold at its current price of $50 in the next 30 days. They choose to initiate a bull put credit spread.

The investor sells a put option with a strike price of $50 for a premium of $3, and buys a put option with a strike price of $45 for a premium of $1, both expiring in 30 days. They earn a net credit of $2 — the difference in premiums. And because one options contract controls 100 shares of the underlying asset, the total credit received would be $200.

Scenario 1: Maximum Profit

The best case scenario for the investor is that the price of the stock is at or above $50 on expiration day. Both put options expire worthless, and the maximum profit is reached. Their total gain is $200, equal to $3 – $1 = $2 x 100 shares, less any commissions and fees. Once the price of the stock is above $50, the higher strike price, the trade ceases to gain additional profit.

Scenario 2: Maximum Loss

The worst case scenario for the investor is that the price of the stock is below $45 on expiration day, resulting in both options being in-the-money. The maximum loss would be reached, which is $300, plus any commissions and fees. That’s because $500 ($50 – $45 x 100) minus the $200 net credit received is $300. Once the price of the stock is below $45, the trade ceases to lose any more money.

Scenario 3: Breakeven

Suppose that on expiration day, the stock trades at $48. The long put, with a strike of $45, is out-of-the-money, and expires worthless, but the short put is in-the-money by $2. The loss on this option is equal to $200 ($2 x 100 shares), which is offset by the $200 credit received. The trader breaks even, as the profit and loss net out to $0.

Related Strategies: Bear Put Debit Spread

The opposite of the bull put credit spread is the bear put debit spread, also known as a debit put spread or bear put spread. In a bear put spread, the investor buys a put option at one strike price and sells a put option at a lower strike price — essentially swapping the order of the bull put credit spread. While this sounds similar to the bull put spread, the construction of the bear put spread results in two key differences.

First, the bear put spread, as its name implies, represents a “bearish” bet on the underlying security. The trade will tend to profit if the price of the underlying asset declines.

Second, the bear put spread is a “debit” transaction — the trader will pay a net premium to enter it, since the premium for the long leg (the higher strike price option) will be more than the premium for the short leg (the lower strike price option).

Bull Put Credit Spread Pros and Cons

There are benefits and drawbacks to using bull put credit spreads when investing.

Pros

Here are some of the key advantages to using a bull put credit spread:

• Potential losses (as well as rewards) are limited when the price moves in an adverse direction; an investor can determine their maximum potential loss upfront.

• The inevitable time decay of options improves the probability that the trade will be profitable.

• Bull put credit spread traders can still make a profit even if the underlying stock price drops slightly, as long as it remains above the breakeven point.

Cons

In addition to the benefits, there are also some disadvantages to be aware of when considering a bull put strategy.

• The profit potential in a put credit spread is limited compared to outright stock purchases, as the strategy focuses on generating income rather than capital appreciation.

• On average, the maximum loss in the strategy is larger than the maximum gain.

• Options strategies are more complicated than some other forms of investing, making it difficult for beginner investors to engage.

The Takeaway

Bull put credit spreads are bullish options trading strategies, where an investor sells one put option and buys another with a lower strike price. That investor can make money when the value of the underlying security of the options goes up, but the trade comes with limited loss and gain potential.

Investors who are ready to try their hand at options trading despite the risks involved, might consider checking out SoFi’s options trading platform offered through SoFi Securities, LLC. The platform’s user-friendly design allows investors to buy put and call options through the mobile app or web platform, and get important metrics like breakeven percentage, maximum profit/loss, and more with the click of a button.

Plus, SoFi offers educational resources — including a step-by-step in-app guide — to help you learn more about options trading. Trading options involves high-risk strategies, and should be undertaken by experienced investors. Currently, investors can not sell options on SoFi Active Invest®.

Explore SoFi’s user-friendly options trading platform.

🛈 While investors are not able to sell options on SoFi’s options trading platform at this time, they can buy call and put options to try to benefit from stock movements or manage risk.

Photo credit: iStock/Ridofranz

SoFi Invest®

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Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire amount invested in a short period of time. Before an investor begins trading options they should familiarize themselves with the Characteristics and Risks of Standardized Options . Tax considerations with options transactions are unique, investors should consult with their tax advisor to understand the impact to their taxes.
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SOIN-Q125-119

Mar

2025

Student Loan Forgiveness Tax Bomb, Explained

Do You Have to Pay Taxes on Forgiven Student Loans?

By Jennifer Calonia | Fresh Out of School, Student Loans, student_loan | Comments Off

The Internal Revenue Service (IRS) generally requires that you report a forgiven or canceled debt as income for tax purposes. But tax on student loan forgiveness is a different matter.

The American Rescue Plan (ARP) Act specifies that student loan debt forgiven between 2021 and 2025, and incurred for postsecondary education expenses, will not be counted as income, and therefore does not incur a federal tax liability.

This includes federal Direct Loans, Family Federal Education Loans (FFEL), Perkins Loans, and federal consolidation loans. Additionally, nonfederal loans such as state education loans, institutional loans direct from colleges and universities, and even private student loans may also qualify.

However, some states have indicated that they still count canceled student loans as taxable income. Read on for more information about taxes on student loans, including which forgiven student debt is taxable and by whom.

Key Points

• Because of the American Rescue Plan Act, student loans forgiven between 2021 and 2025 are exempt from federal taxation.

• Five states — Arkansas, Indiana, Mississippi, North Carolina, and Wisconsin — still tax forgiven loans.

• Use a student loan forgiveness tax calculator to estimate potential state tax liability.

• Set aside monthly payments to save for potential tax bills on forgiven student loans after 2025.

• Explore the student loan interest deduction to help reduce federal taxable income.

Types of Student Loan Forgiveness Programs

Federal student debt can typically be canceled through an income-driven repayment plan (IDR) or forgiveness programs. However, as of March 2025, applications for income-driven repayment plans are on hold while the Trump administration reevaluates them. You can find out more about this situation on the Federal Student Aid (FSA) website.

Here are some common federal forgiveness programs and how typically they work.

Public Service Loan Forgiveness (PSLF)

If you are employed full-time for the government or a nonprofit organization, you may be eligible for Public Service Loan Forgiveness for federal student loans like federal Direct Loans.

After you make 120 qualifying payments under an income-driven repayment plan for an eligible employer, the PSLF program forgives the remaining balance on your federal student loans.

However, because IDR plans are currently not accepting applications, and you must achieve forgiveness by repaying your loans under one of these plans, you will likely need to wait before you can start working toward PSLF. You can get more details about PSLF on the FSA website.

Income-Driven Repayment (IDR) Forgiveness

IDR options generally offer loan forgiveness after borrowers make consistent payments for a certain number of years. However, forgiveness on all but one of the IDR plans is paused as of March 2025.

On an IDR plan, how much you owe each month is based on your monthly discretionary income and family size. These are the types of IDR plans.

• Income-Based Repayment: With IBR, payments are generally about 10% of a borrower’s discretionary income, and any remaining balance is forgiven after 20 or 25 years. On the IBR plan, forgiveness (after the repayment term has been met) is still proceeding as of March 2025, since this plan was separately enacted by Congress.

• Saving on a Valuable Education (SAVE): As of March 2025, the SAVE plan is no longer available after being blocked by a federal court. Forgiveness has been paused for borrowers who were already enrolled in the SAVE plan, and they have been placed in interest-free forbearance.

• Pay As You Earn (PAYE): The monthly payment on PAYE is about 10% of a borrower’s discretionary income, and after 20 years of qualifying payments, the outstanding loan balance is forgiven. As of March 2025, forgiveness has been paused for borrowers who were already enrolled in this plan, and they have been placed in interest-free forbearance.

• Income-Contingent Repayment (ICR): The monthly payment amount on ICR is either 20% of a borrower’s discretionary income divided by 12, or the amount they would pay on a repayment plan with a fixed payment over 12 years, whichever is less. After 25 years of repayment, the remaining loan balance is forgiven. As of March 2025, forgiveness has been paused for borrowers who were already enrolled in the plan, and they have been placed in interest-free forbearance.

Teacher Loan Forgiveness

With Teacher Loan Forgiveness (TLF), teachers who have been employed full-time for five consecutive years at an eligible school and meet certain other qualifications may be eligible to have up to $17,500 of their federal Direct Subsidized and Unsubsidized Loans and federal Stafford Loans forgiven.

Recommended: Do Student Loans Count as Income?

Which Student Loan Cancellations Are Not Federally Taxed?

When it comes to student loan forgiveness and taxes, under the provisions of the ARP Act, private or federal student debt for postsecondary education that was or is forgiven in the years of 2021 through 2025 will not be federally taxed. This means that these borrowers are not required to report their discharged loan amount as earned income, and the forgiven amount is not taxable.

Beyond the special five-year window of tax exemption provided by the ARP Act, participants in the Public Service Federal Loan program who receive forgiveness don’t have to pay taxes on their canceled loan amount. The PSLF program explicitly states that earned forgiveness through PSLF is not considered taxable income.

Which Student Loan Cancellations Are Federally Taxed?

Borrowers who receive loan cancellation after successfully completing an income-driven loan repayment plan can generally expect to pay taxes. However, those whose debt was or will be discharged in the years 2021 through 2025, will not need to pay federal taxes on their forgiven loans due to the ARP Act.

Forgiven amounts that are taxable are treated as earned income during the fiscal year it was received. Your lender might issue tax Form 1099-C to denote your debt cancellation.

💡Quick Tip: Enjoy no hidden fees and special member benefits when you refinance student loans with SoFi.

Which States Tax Forgiven Student Loans?

Typically, states follow the tax policy of the federal government. But some states have announced that their residents must include their forgiven or canceled student loan amount on their state tax returns.

As of March 2025, the five states that say certain forgiven loans are taxable are:

• Arkansas (except for loans forgiven through PSLF)

• Indiana (except for loans forgiven through PSLF, TLF, and certain other programs)

• Mississippi

• North Carolina

• Wisconsin (except for loans forgiven through PSLF and TLF).

It’s important to consult a qualified tax professional who is knowledgeable about forgiveness of student loans in your state to confirm the latest information of how much you owe.

How to Prepare for Taxes on Forgiven Student Loans

If you’re anticipating a tax liability after receiving loan forgiveness, there are a few steps you can take to get ready.

Step 1: Calculate Your Potential Tax Bill

The first step when preparing for a student loan forgiveness tax bill is calculating how much you might owe come tax season. This can be influenced by factors including the type of forgiveness you are receiving and the forgiven amount.

To avoid sticker shock, you can use a student loan forgiveness tax calculator, like the Loan Simulator on StudentAid.gov. It lets you see how much of your student loan debt might be forgiven, based on your projected earnings.

Step 2: Choose the Right Plan

Although IDR plans are not currently accepting applications, they are designed to help keep borrowers’ monthly payments to a manageable amount while they’re awaiting loan forgiveness. All of these repayment plans calculate a borrower’s monthly payment based on their discretionary income and family size.

Step 3: Prioritize Saving

If you’re expecting loan forgiveness after 2025, it might be beneficial to start allocating extra cash flow to a dedicated tax savings fund now. Incrementally setting money aside over multiple years can ease the burden of a sudden lump-sum tax bill down the line.

Another way to potentially save some money is to take the student loan interest deduction on your taxes each year, if you qualify. The deduction, which is up to $2,500 annually, can reduce your taxable income.

You’ll need your student loan tax form to make sure you are eligible for the deduction. The form should be sent to you by your loan servicer or lender. You’ll file the form with your taxes.

Recommended: Guide to Student Loan Tax Deductions

What If I Can’t Afford to Pay the Taxes?

If you can’t afford to cover an increased tax bill, contact the IRS to discuss your options. Inquire about payment plans that can help you pay smaller tax payments over a longer period of time. However, be aware that fees and interest may accrue on such plans.

The Takeaway

Thanks to a special law passed by Congress in 2021, post-secondary education loans forgiven from 2021 through 2025 will not count as earned income and will not be federally taxed. That said, state taxes may be due on forgiven loans, depending on where the borrower lives.

Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.

With SoFi, refinancing is fast, easy, and all online. We offer competitive fixed and variable rates.

FAQ

Is loan repayment considered taxable income?

If your employer offers loan repayment assistance benefits, they would typically be considered taxable income. However under the CARES Act, which was signed into law in 2020, employer assistance loan payments up to $5,250 made each year from 2021 through 2025 are tax-free.

Will refinancing my student loans help me avoid taxes?

Refinancing student loans does not involve taxes. However, the interest you pay on a refinanced student loan may qualify for the student loan interest deduction. If you’re eligible, you may be able to deduct up to $2,500, which could lower your taxable income.

Will student loan forgiveness be taxed after 2025?

The American Rescue Plan Act stipulates that forgiven student loans will not be taxed from 2021 through 2025. Currently, there are no plans to extend that tax relief beyond 2025.

Are state taxes different for forgiven student loans?

While states typically follow the federal tax policy, five states say that certain forgiven loans are taxable. Those five states are: Arkansas (except for loans forgiven through Public Service Loan Forgiveness), Indiana (except for loans forgiven through PSLF, Teacher Loan Forgivenesss, and certain other programs), Mississippi, North Carolina, and Wisconsin (except for loans forgiven through PSLF and TLF).

What steps should I take if I owe taxes on forgiven student loans?

If you owe taxes on forgiven student loans, calculate how much you’ll owe in taxes with the forgiven loan amount factored into your taxable income. Then, once you have the estimate of what you owe, you can start saving up to pay it. One way to do this is to put away the monthly amount you previously paid on your student loans to help offset the amount you owe. So if your student loan payment was $100 a month, deposit that amount monthly into a savings account, and use it to help pay what you owe in taxes.

Photo credit: iStock/fizkes

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Terms and conditions apply. SoFi Refinance Student Loans are private loans. When you refinance federal loans with a SoFi loan, YOU FOREFEIT YOUR EILIGIBILITY FOR ALL FEDERAL LOAN BENEFITS, including all flexible federal repayment and forgiveness options that are or may become available to federal student loan borrowers including, but not limited to: Public Service Loan Forgiveness (PSLF), Income-Based Repayment, Income-Contingent Repayment, extended repayment plans, PAYE or SAVE. Lowest rates reserved for the most creditworthy borrowers. Learn more at SoFi.com/eligibility. SoFi Refinance Student Loans are originated by SoFi Bank, N.A. Member FDIC. NMLS #696891 (www.nmlsconsumeraccess.org).

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Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

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SOSLR-Q125-020

Mar

2025

What Are Bull Put Spreads & How Do They Work?

Bull Put Spread: How This Options Strategy Works

By Brian Nibley | Going to College, invest, Investing, Terminology | Comments Off

A bull put spread is an options trading strategy that investors might use when they have a moderately bullish view of an asset, meaning they think the price will increase slightly. The strategy provides the potential for profit from an increase in an underlying asset’s price while limiting losses if an asset’s price declines.

Bull put spreads and options trading are not for everyone, but learning the ins and outs of this commonly used vertical options spread could be useful to traders’ looking to pursue gains while capping downside risk.

Key Points

• Bull put spreads allow investors to profit from modest price increases in the underlying asset, aligning with a moderately bullish market outlook.

• In a bull put spread strategy, an investor sells a put option, and buys another put option on the same security, with the same expiration date, but with lower strike price.

• The maximum gain with this strategy is the difference between the premium received for selling the put with the higher strike price and the premium paid for buying the second put, minus any commissions or fees.

• This strategy limits risk by capping maximum loss, providing protection from significant downside risk.

• Time decay helps as the short put loses value faster than the long put, letting traders keep more of the initial credit if the asset’s price stays stable or rises.

• Bull put spreads can be adjusted to align with different risk tolerances and market views, making them a flexible tool within options trading.

What Is a Bull Put Spread?

A bull put spread is an options trading strategy that involves buying a put option and selling another put option on the same underlying asset with the same expiration date, but at different strike prices. The trade is considered a neutral-to-bullish strategy, since it’s designed so the maximum benefit occurs when an asset’s price moderately increases.

To execute a bull put spread, a trader will simultaneously sell a put option at a specific strike price (the short leg of the trade) and buy a put option with a lower strike price (the long leg of the trade).

The trader receives a premium for selling the option with a higher strike price but pays a premium for buying the put option with a lower strike price. The premium paid for the long leg put option will always be less than the short leg since the lower strike put is further out of the money. The difference between the premium received and the premium paid is the maximum potential profit in the trade.

The goal of the bull put spread strategy is to finish the trade with the premium earned by selling the put (sometimes referred to as writing a put option) and lose no more than the premium paid for the long put.

A bull put spread options trading strategy is sometimes called a short put spread or a credit put spread.

How a Bull Put Spread Works

Bull put spreads focus on put options, which are options contracts that give the buyer the right – but not always the obligation – to sell a security at a given price (the strike price) during a set period of time.

The bull put spread strategy earns the highest profit in situations where the underlying stock trades at or above the strike price of the short put option – the put option sold with the higher strike price – upon expiration. This strategy, therefore, works best for assets that the traders of a bull put spread believe will trade slightly upwards.

The strategy offers investors the potential to benefit from a stock’s rising price without having to hold shares. An options strategy like this also caps downside risk because the maximum loss is calculated as the difference between the strike prices of the two puts minus the net credit received.

Even though the risk is limited, there can still be times when it makes sense to close out the trade.

Max Profit and Risk

A bull put spread is meant to profit from a rising stock price, time decay, or both. This strategy caps both potential profit and loss, meaning its risk is limited.

The profit of a bull put spread is capped at the premium received by selling the short leg of the trade, minus the premium spent buying the long leg put option. This maximum profit is therefore seen if the underlying asset finishes at any price above the strike price of the short leg of the trade.

Maximum profit = premium received for selling put option – premium paid for buying put option

The maximum loss of a bull put spread is the difference between the strike prices of the short put and the long put, minus the net premium received. This occurs if the underlying asset’s price falls below the long put’s strike price at expiration.

Maximum loss = strike price of short put – strike price of long put – net premium received

The breakeven point of a bull put spread is the price the underlying asset trades at expiration so that the trader will come away even. The breakeven point is calculated as the strike price of the short put (the higher strike price) minus the net premium received upfront for the sale and purchase of both puts. At the breakeven, the trader neither makes nor loses money, not including commissions and fees.

Breakeven point = strike price of short put – net premium received

Bull Put Spread Example

A trader would like to use a bull put spread for XYZ stock since they think the price will slowly go up a month from now. XYZ is trading at $150 per share. The trader sells a put option for a premium of $3 with a strike price of $150. At the same time, they buy a put option with a premium of $1 and a strike price of $140 to limit their downside risk. Both put options have the same expiration date in a month.

The trader collects the difference between the two premiums, which is $2 ($3 – $1). Since each option contract is usually for 100 shares of stock, she’d collect a $200 premium when opening the bull put spread.

Maximum Profit

As long as XYZ stock trades at or above $150 at expiration, both puts will expire worthless, and the trader will keep the $200 premium received at the start of the trade, minus commissions and fees.

Maximum profit = $3 – $1 = $2 x 100 shares = $200

Maximum Loss

The trader will experience the maximum loss if XYZ stock trades below $140 at expiration, the lower strike price of the long leg of the trade. In this scenario, the trader will lose $800, plus commissions and fees.

Maximum loss = $150 – $140 – ($3 – $1) = $8 x 100 shares = $800

Breakeven

If XYZ stock trades at $148 at expiration, the trader will lose $200 from the short leg of the trade with the $150 stock price. However, this will be balanced out by the initial $200 premium they received when opening the position. The trader neither makes nor loses money in this scenario, not including commissions and fees.

Breakeven point = $150 – ($3 – $1) = $148

Bull Put Spread Exit Strategy

Often, trades don’t go as planned. If they did, trading would be easy, and everyone would succeed. It’s important for investors to consider how they might mitigate risk before they begin initiating a strategy, especially given the higher risk associated with options trading.

Having an exit strategy can help by providing a plan to cut losses at a predetermined point, rather than being caught off guard.

An exit strategy may be a little complicated for a bull put spread. Before the expiration date, you may want to exit the trade so you don’t have to buy an asset you may be obligated to purchase because you sold a put option. You may also decide to exit the position if the underlying asset price is falling and you want to limit your losses rather than take the maximum loss.

To close out a bull put spread entirely would require that the trader buy the short put contract to close and sell the long put option to close.

Recommended: Buy to Open vs Buy to Close

Pros and Cons of Bull Put Spreads

The following are some of the advantages and disadvantages of bull put spreads:

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Bull Put Spread Pros:

• Protection from downside risk; the maximum loss is known at the start of the trade

• The potential to profit from a modest decline in the price of the underlying asset price

• You can tailor the strategy based on your risk profile

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Bull Put Spread Cons:

• The gains from the strategy will be limited and may be lower than if the trader bought the underlying asset outright

• Maximum loss is usually more substantial than the maximum gain

• Difficult trading strategy for novice investors

Impacts of Variables

Several variables impact options prices, and options trading terminology describes how these variables might change in a given position.

Because a bull put spread consists of a short put and a long put, changes in certain variables can impact the position differently than other options positions. Here’s a brief summary.

1. Stock Price Change

A bull put spread does well when the underlying security price rises, making it a bullish strategy. When the price falls, the spread performs poorly. This is known as a position with a “net positive delta.” Delta is an options measurement that refers to how much the price of an option will change as the underlying security price changes. The ratio of a stock’s price change to an option’s price change is not usually one-to-one.

Because a bull put spread is made up of one long put and one short put, the delta often won’t change much as the stock price changes if the time to expiration remains constant. This is known as a “near-zero gamma” trade. Gamma in options trading is an estimation of how much the delta of a position will change as the underlying stock price changes.

2. Changes in Volatility

Volatility refers to how much the price of a stock might fluctuate in percentage terms across a specific timeline. Implied volatility (IV) is a variable in options prices. Higher volatility usually means higher options prices, assuming other factors stay the same. But a bull put spread changes very little when volatility changes, and everything else remains equal.

This is known as a “near-zero vega” position. Vega measures how much an option price will change when volatility changes, but other factors remain constant.

3. Time

Time decay refers to the fact that the value of an option declines as expiration draws near. The relationship of the stock price to the strike prices of the two put options will determine how time decay impacts the price of a bull put spread.

If the price of the underlying stock is near or above the strike price of the short put (the option with a higher strike price), then the price of the bull put spread narrows (allowing the trader to potentially profit) as time goes on. This occurs because the short put is closest to being in the money and falls victim to time decay more rapidly than the long put.

But if the stock price is near or below the long put’s strike price (the option with a lower strike price), then the value of the bull put spread widens (causing a loss) as time goes on. This occurs because the long put is closer to being in the money and will suffer the effects of time decay faster than the short put.

In cases where the underlying asset’s price is squarely in-between both strike prices, time decay barely affects the price of a bull put spread, as both the long and short puts will suffer time decay at more or less the same rate.

4. Early assignment

American-style options can be exercised at any time before expiration. Writers of a short options position can’t control when they might be required to fulfill the obligation of the contract. For this reason, the risk of early assignment (i.e., the risk of being required to buy the underlying asset per the option contract) must be considered when entering into short positions using options.

In a bull put spread, only the short put has early assignment risk because it represents the obligation to purchase the underlying asset. Early assignment of options usually has to do with dividends, and sometimes short puts can be assigned on the underlying stock’s ex-dividend date (the date someone has to start holding a stock if they want to receive the next dividend payment).

In-the-money puts with time value that doesn’t match the dividends of the underlying stock are likely to be assigned, as traders could earn more from the dividends they receive as a result of holding the shares than they would from the premium of the option.

For this reason, if the underlying stock price is below the short put’s strike price in a bull put spread, traders may want to contemplate the risk of early assignment. In cases where early assignment seems likely, using an exit strategy of some kind could be appropriate.

The Bottom Line

A bull put spread is one of four frequently used vertical options spreads that traders may use to try to benefit from the price movements of stocks or other assets. While the potential rewards of a bull put spread are limited, so too are its potential losses when the stock price moves in an unfavorable direction, which can make it a useful strategy for traders to have in their toolkit.

Trading options isn’t easy and can involve significant risk. Many variables are involved in options trading, some of which have been notorious for catching newbie traders by surprise. It’s important to consider your risk tolerance before initiating an options trade.

Explore SoFi’s user-friendly options trading platform.

🛈 While investors are not able to sell options on SoFi’s options trading platform at this time, they can buy call and put options to try to benefit from stock movements or manage risk.

Photo credit: iStock/kate_sept2004
SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SOIN-Q125-101

Mar

2025

What Are IRA and Roth IRA Fees?

By Rebecca Lake | invest, Investing, Preparing for Retirement | Comments Off

When opening an Individual Retirement Account (IRA), it’s important to consider any fees that might be involved. Typical IRA fees may include annual maintenance fees and account closure fees. You may also pay a fee to roll funds over to an IRA or close your account and transfer funds elsewhere.

Factoring in fees matters when deciding where to open an IRA. The more you pay in fees, the less of your investment dollars you get to keep. Understanding the various IRA fees you might encounter can make it easier to choose the right option for your retirement savings.

Key Points

• IRAs, including traditional and Roth, may incur fees such as maintenance (custodial) fees, and account closure fees.

• A good IRA maintenance fee is ideally below 1% annually, with some brokerages waiving fees entirely.

• IRA fees can be charged one-time, monthly, yearly, or per transaction, affecting overall investment returns.

• Roth IRAs are funded with after-tax dollars, offering tax-free qualified distributions, while traditional IRAs typically use pre-tax dollars with taxable distributions.

• Comparing fee schedules of different brokerages is crucial to minimize costs and maximize retirement savings.

Fees IRAs Can Charge

Brokerages and banks that offer retirement accounts can charge a variety of IRA fees and some are more fee-friendly than others. Some of the most common fees you might encounter with an IRA can include:

• Account maintenance fees. Some brokerages charge IRA maintenance (or custodial) fees simply for having an account. You may pay a flat fee or a percentage of the assets in your account on a monthly or yearly basis. It doesn’t matter what type of account you have, as there’s typically no real difference between traditional IRA and Roth IRA maintenance fees.

• Account closure fees. If you open an IRA at one brokerage, then decide to close it, you may pay a fee to terminate your account.

It’s difficult to determine how much an investor might pay in IRA fees on average, as every brokerage follows a different fee schedule. For example, you might pay a small account maintenance fee at one brokerage, while another charges no maintenance fee at all.

As for fees for opening a Roth IRA or traditional IRA, many financial institutions don’t charge this fee. If they do, account setup fees may be in the neighborhood of $25 to $50. Additionally, it could cost $100 or more to close your account and move it elsewhere.

¹Terms and conditions apply. Roll over a minimum of $20K to receive the 1% match offer. Matches on contributions are made up to the annual limits.

How Are IRA Fees Charged?

Traditional IRA fees and Roth IRA fees are set by the financial institution that’s offering the account. Typically, there are fours ways fees can be assessed:

• One-time

• Monthly

• Yearly

If you’re worried about losing money in an IRA, it’s important to know when fees can apply and how much you’ll pay. You may be focused on making sure your investments do well to avoid losses, but fees can easily leech away your earnings little by little if you’re not paying attention.

Reviewing a brokerage’s fee schedule before opening an IRA can give you a better idea of what you might pay in terms of upfront fees and ongoing costs. You can also review the prospectus for each mutual fund or ETF you plan to invest in to see how much you might pay for the expense ratio. The expense ratio is set by the mutual fund company, not the brokerage.

The Takeaway

Opening an IRA can get you closer to your retirement savings goals, while allowing you to enjoy some tax benefits along the way. When deciding where to open an IRA, it’s important to zero in on the fees as that can affect your overall account growth long-term.

If you’re ready to get started with retirement planning, it’s easy to open an IRA with SoFi. You can get your account up and running in minutes online, and choose between automated or DIY investing to help you reach your goals.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Help build your nest egg with a SoFi IRA.

FAQ

What is a good IRA maintenance fee?

A good IRA maintenance fee is no fee at all, as some brokerages waive annual and monthly account maintenance fees.

How are fees paid in an IRA?

Some IRA providers charge account maintenance fees that you may pay one time, monthly, or annually. Check with the financial institution offering the account.

Are IRA fees higher than 401(k) fees?

A 401(k) can charge its own fees and whether they’re higher or lower than IRA fees largely depends on who manages the plan. Fees for a 401(k) may outpace IRA fees in some instances.

About the author

Rebecca Lake

Rebecca Lake has been a finance writer for nearly a decade, specializing in personal finance, investing, and small business. She is a contributor at Forbes Advisor, SmartAsset, Investopedia, The Balance, MyBankTracker, MoneyRates and CreditCards.com. Read full bio.

Photo credit: iStock/supersizer

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

SOIN0523002

Mar

2025

What Is a Required Minimum Distribution (RMD) for IRAs

By Rebecca Lake | invest, Investing, Preparing for Retirement | Comments Off

Individual retirement accounts (IRAs) are retirement savings accounts that offer certain tax-advantages. Some types of IRAs, including traditional and inherited Roth IRAs, are subject to required minimum distribution (RMD) rules.

What is an RMD on an IRA? In simple terms, it’s a withdrawal you make from an RMD every year once you reach a certain age. RMDs are a way for the IRS to ensure that retirement savers meet their tax obligations. Failing to take distributions when you’re supposed to could result in a tax penalty, so it’s important to know when you must take an RMD on an IRA.

Key Points

• Required minimum distributions (RMDs) are mandatory withdrawals from IRAs that account owners must start taking at age 73, as per IRS rules.

• RMDs apply to traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k)s, and other defined contribution plans.

• The RMD amount account holders need to withdraw is calculated using the IRS Uniform Lifetime or life expectancy tables.

• Failing to take RMDs can result in a 25% excise tax, reduced to 10% if corrected within two years.

• RMDs are taxed as ordinary income, and qualified charitable distributions (QCDs) can be used to reduce tax liability.

Required Minimum Distribution (RMD) Definition

A required minimum distribution is an amount you need to withdraw from an IRA account each year once you turn 73. (In 2023 the SECURE 2.0 Act increased the age that individuals had to start taking RMDs to age 73 for those who reach 72 in 2023 or later.) You can take out more than the minimum amount with an RMD, but you must withdraw at least the minimum to avoid an IRS tax penalty.

The minimum amount you need to withdraw when taking an RMD is based on specific IRS calculations (see more about that below).

Special Considerations for RMDs

RMD rules apply to multiple types of retirement accounts. You’re subject to RMDs if you have any of the following:

• Traditional IRA

• SEP IRA

• SIMPLE IRA

• 401(k) plan

• 403(b) plan

• 457(b) plan

• Profit-sharing plan

• Other defined contribution plans

• Inherited IRAs

You must calculate RMDs for each account separately.

Failing to take RMD distributions from IRAs or other eligible investment accounts on time can be costly. The SECURE 2.0 Act allows the IRS to assess a 25% excise tax on the amount you failed to withdraw. That penalty might drop to 10% if the RMD is properly corrected within two years.

Why Do You Have to Take an RMD?

The IRS imposes RMD rules on IRAs and other retirement accounts to prevent savers from deferring taxes on earnings indefinitely. Here’s how it works.

When you contribute to a traditional IRA, SEP IRA, SIMPLE IRA, 401(k), or a simple retirement plan, you fund your account with pre-tax dollars (meaning you haven’t yet paid tax on that money). In exchange, you may be able to deduct some or all of the contributions you make.

Your account grows tax-deferred, and when you make qualified withdrawals in retirement, you pay ordinary income tax on earnings. If you were to leave the money in your IRA untouched, the IRS couldn’t collect tax on earnings, hence the need for RMDs.

Roth IRAs generally don’t have RMDs. When you make contributions to a Roth account you use after-tax dollars — in other words, you’ve already paid taxes on that money. So you don’t have to pay taxes again when you make qualified withdrawals in retirement. However, if you inherit a Roth IRA, you will be required to take RMDs.

¹Terms and conditions apply. Roll over a minimum of $20K to receive the 1% match offer. Matches on contributions are made up to the annual limits.

RMDs for Roth and Traditional IRAs

When you open an IRA, you will typically choose between a Roth IRA or traditional IRA. There are differences between them when it comes to RMDs. Traditional IRAs are always subject to RMD rules. If you contribute to a traditional IRA, whether you max out the annual contribution limit or not, you can expect to take RMDs from your account later. RMD rules also apply when you inherit a traditional IRA.

Are there RMDs on Roth IRA accounts? No, if you’re making original contributions to a Roth IRA that you own. But you will need to take RMDs if you inherit a Roth IRA from someone else.

The IRS determines when you must take distributions from an inherited Roth IRA. The timing depends on whether the person you inherited a Roth IRA from was your spouse and whether they died before 2020 or in 2020 or later.

If you inherit an IRA from a spouse who passed away before 2020, you may:

• Keep the account as your own, taking RMDs based on your life expectancy, or follow the 5-year rule, meaning you generally fully withdraw the account balance by the end of the 5th year following the year of death of the account holder

• Roll over the account to your own IRA

If you inherit an IRA from a spouse who passed away in 2020 or later, you may:

• Keep the account as your own, taking RMDs based on your life expectancy, delay beginning distributions until the spouse would have turned 72, or follow the 10-year rule, generally fully withdrawing the account balance by the end of the 10th year following the year of death of the account owner

• Roll over the account to your own IRA

If you inherit an IRA from someone who is not your spouse and who passed away before 2020, you may:

• Take distributions based on your own life expectancy beginning the end of the year following the year of death

• Follow the 5-year rule

If you inherited an IRA from someone who is not your spouse and who passed away in 2020 or later and you are a designated beneficiary, you may:

• Follow the 10-year rule

IRA withdrawal rules for inherited IRAs can be tricky so if you know that someone has named you as their IRA beneficiary, you may find it helpful to discuss potential tax implications with a financial advisor.

How To Calculate RMDs on an IRA

To calculate RMDs on an IRA, you divide the balance of your account on December 31 of the prior year by the appropriate life expectancy factor set by the IRS. The IRS publishes life expectancy tables for RMDs in Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). You choose the life expectancy table that applies to your situation.

IRA Required Minimum Distribution Table Example

The IRS uses the Uniform Lifetime Table to determine RMDs for people who are:

• Unmarried account owners

• Married IRA owners whose spouses aren’t more than 10 years younger

• Married IRA owners whose spouses are not the sole beneficiaries of their account

Here’s how RMD distributions break down.

Age	Distribution Period (Years)	Age	Distribution Period (Years)
72	27.4	97	7.8
73	26.5	98	7.3
74	25.5	99	6.8
75	24.6	100	6.4
76	23.7	101	6.0
77	22.9	102	5.6
78	22.0	103	5.2
79	21.1	104	4.9
80	20.2	105	4.6
81	19.4	106	4.3
82	18.5	107	4.1
83	17.7	108	3.9
84	16.8	109	3.7
85	16.0	110	3.5
86	15.2	111	3.4
87	14.4	112	3.3
88	13.7	113	3.1
89	12.9	114	3.0
90	12.2	115	2.9
91	11.5	116	2.8
92	10.8	117	2.7
93	10.1	118	2.5
94	9.5	119	2.3
95	8.9	120 and over	2.0
96	8.4

Source: IRS Uniform Lifetime Table

And here’s an example of how you might use this table to calculate RMDs on an IRA.

Assume that you’re 75 years old and have $1 million in your IRA as of last December 31. You find your distribution period on the chart, which is 24.6, then divide your IRA balance by that number.

$1 million/24.6 = $40,650 RMD

You’ll need to recalculate your RMDs each year, based on the new balance in your IRA and your life expectancy factor. You can use an online calculator to figure out RMD on an IRA annually.

Withdrawing Required Minimum Distribution From an IRA

There are two deadlines to know when making RMDs from an IRA: when distributions must begin and when you must complete distributions for the year. The SECURE 2.0 Act introduced some changes to the timing of RMD withdrawals from an IRA.

When Do RMDs Start?

Beginning in 2023, the minimum age at which you must begin taking RMDs rose to 73 (that’s the same age you must begin taking RMDs for 401(k)s, in case you are wondering). The deadline for the very first RMD you’re required to make when you turn 73, is April 1 of the following year. So, if you turned 73 in 2025, then your first RMD would be due no later than April 1, 2026.

Once you make your first RMD, all other RMDs after that are due by December 31 each year. So, using the example above, if you make your first RMD on April 1, 2026, then you’d need to make your second RMD by December 31 of that same year to avoid a tax penalty. Just keep in mind that taking two RMDs in one year could increase your tax burden for the year.

Qualified Charitable Distributions (QCDs)

Qualified charitable distributions (QCDs) are amounts you contribute to an eligible charity from your IRA. QCDs are tax-free and count toward your annual RMD amount, and you can contribute up to $100,000 per year. Using your IRA to make QCDs can lower the amount of tax you have to pay while supporting a worthy cause.

For a distribution to count as a QCD, it must be made directly from your IRA to an eligible charity. You can’t withdraw funds from your IRA to your bank account and then use the money to write a check to your favorite charity.

Note that QCDs are not tax-deductible on Schedule A, the way that other charitable donations are.

How RMDs Are Taxed

RMDs are taxed as ordinary income, assuming that all of the contributions you made were tax-deductible. If you have a traditional IRA, your RMDs would be taxed according to whichever bracket you fall into at the time the withdrawals are made.

With an inherited Roth IRA, withdrawals of original contributions are tax-free. Most withdrawals of earnings from an inherited Roth IRA are also tax-free unless the account is less than five years old at the time of the distribution.

The Takeaway

The IRS requires you to take RMDs on certain types of IRAs, including traditional IRAs and inherited Roth IRAs. Knowing at what age you’re required to take money from an IRA and your deadline for withdrawing it can help you plan ahead and avoid a potentially steep tax penalty.

In general, coming up with a financial plan for your future can help you work toward your retirement goals. You can consider different options for saving and investing, including IRAs, 401(k)s, or other types of savings or investment vehicles, to help determine the best fit for your money.

Ready to invest for your retirement? It’s easy to get started when you open a traditional or Roth IRA with SoFi. SoFi doesn’t charge commissions, but other fees apply (full fee disclosure here).

Invest with as little as $5 with a SoFi Active Investing account.

FAQ

What happens if you don’t take RMDs from an IRA?

Failing to take an RMD from an IRA on time can result in a tax penalty. The current penalty is generally a 25% excise tax, assessed against the amount you were required to withdraw.

Do you have to take your IRA RMD if you are still working?

You do have to take RMDs from an IRA even if you’re still working. It’s worth noting that the IRS does typically allow you to defer RMDs from a 401(k) while you’re working — however, that rule doesn’t extend to IRAs.

Are you required to use IRA RMD money for specific purposes?

You can use RMDs money in any way that you like. Some common uses for IRA RMDs include medical expenses, home repairs, and day-to-day costs. You can also use IRA RMDs to make qualified charitable donations (QCD), which could minimize some of the tax you might owe. QCDs must be made directly from your IRA to the charity.

About the author

Rebecca Lake

Photo credit: iStock/FG Trade

SoFi Invest®

INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE

SoFi Invest encompasses two distinct companies, with various products and services offered to investors as described below: Individual customer accounts may be subject to the terms applicable to one or more of these platforms.
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
For a full listing of the fees associated with Sofi Invest please view our fee schedule.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

SOIN-Q324-035

What Is a Bull Put Credit Spread? Definition and Example

How a Bull Put Credit Spread Works

Profiting from a Bull Put Credit Spread

Maximum Gain, Loss, and Break-Even of a Bull Put Credit Spread

Example of a Bull Put Credit Spread

Scenario 1: Maximum Profit

Scenario 2: Maximum Loss

Scenario 3: Breakeven

Related Strategies: Bear Put Debit Spread

Bull Put Credit Spread Pros and Cons

Pros

Cons

The Takeaway

Do You Have to Pay Taxes on Forgiven Student Loans?

Types of Student Loan Forgiveness Programs

Public Service Loan Forgiveness (PSLF)

Income-Driven Repayment (IDR) Forgiveness

Teacher Loan Forgiveness

Which Student Loan Cancellations Are Not Federally Taxed?

Which Student Loan Cancellations Are Federally Taxed?

Which States Tax Forgiven Student Loans?

How to Prepare for Taxes on Forgiven Student Loans

Step 1: Calculate Your Potential Tax Bill

Step 2: Choose the Right Plan

Step 3: Prioritize Saving

What If I Can’t Afford to Pay the Taxes?

The Takeaway

FAQ

Is loan repayment considered taxable income?

Will refinancing my student loans help me avoid taxes?

Will student loan forgiveness be taxed after 2025?

Are state taxes different for forgiven student loans?

What steps should I take if I owe taxes on forgiven student loans?

Bull Put Spread: How This Options Strategy Works

What Is a Bull Put Spread?

How a Bull Put Spread Works

Max Profit and Risk

Bull Put Spread Example

Maximum Profit

Maximum Loss

Breakeven

Bull Put Spread Exit Strategy

Pros and Cons of Bull Put Spreads

Bull Put Spread Pros:

Bull Put Spread Cons:

Impacts of Variables

1. Stock Price Change

2. Changes in Volatility

3. Time

4. Early assignment

The Bottom Line

What Are IRA and Roth IRA Fees?

Fees IRAs Can Charge

Get a 1% IRA match on rollovers and contributions.

Double down on your retirement goals with a 1% match on every dollar you roll over and contribute to a SoFi IRA.1

How Are IRA Fees Charged?

The Takeaway

FAQ

What is a good IRA maintenance fee?

How are fees paid in an IRA?

Are IRA fees higher than 401(k) fees?

What Is a Required Minimum Distribution (RMD) for IRAs

Required Minimum Distribution (RMD) Definition

Special Considerations for RMDs

Why Do You Have to Take an RMD?

Get a 1% IRA match on rollovers and contributions.

Double down on your retirement goals with a 1% match on every dollar you roll over and contribute to a SoFi IRA.1

RMDs for Roth and Traditional IRAs

How To Calculate RMDs on an IRA

IRA Required Minimum Distribution Table Example

Withdrawing Required Minimum Distribution From an IRA

When Do RMDs Start?

Qualified Charitable Distributions (QCDs)

How RMDs Are Taxed

The Takeaway

FAQ

What happens if you don’t take RMDs from an IRA?

Do you have to take your IRA RMD if you are still working?

Are you required to use IRA RMD money for specific purposes?

JOIN THE COMMUNITY

Double down on your retirement goals with a 1% match on every dollar you roll over and contribute to a SoFi IRA.¹

Double down on your retirement goals with a 1% match on every dollar you roll over and contribute to a SoFi IRA.¹

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Personal
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