NON SPORTS, but important. New RMD rules as of 1/23 called the SECURE 2.0 Act of 2022
MCMLVTopps
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I was somewhat reluctant to post this here, but this new law has changed things for the RMD (Required Minimum Distribution) rules. RMDs are the goverments way of saying they want their tax dollars from your pre-tax savings, 401k, IRA, etc. Failure to meet the deadline to make these withdrawals incur penalties.
If this does not apply to you, pls disregard. However, it may well apply to a family member whose Fiduciary, or Investment Firm has not, or does not timely advise their clients of these changes.
Source: Lord Abbett investments, Slott Report; IRA RMD Age Made Easy.
Required minimum distributions pushed to age 73
The SECURE Act of 2019 changed the age at which RMDs begin from 70½ to 72. Secure 2.0 increases the age at which RMDs begin to age 73 for those individuals who turn 72 on or after January 1, 2023. Notably, an individual who attains age 72 in 2023 is not required to take an RMD for 2023. The RMD age changes again in 2033 from 73 to 75.
SECURE 2.0, effective for distributions made after December 31, 2022, increases the RMD age to 73 for those IRA owners (including SEP and SIMPLE, but not Roth IRAs) who turn 72 after December 31, 2022. In other words, if you turn age 72 in in 2023 or later, a minimum distribution is not required until the year you turn age 73. However, if you turned age 72 in 2022 or earlier, you are required to continue taking your minimum distributions as before; there are no changes impacting individuals who reached RMD age prior to 2023.
For those individuals turning age 72 this year (2023), you will not have to begin taking RMDs from your IRA until next year, 2024, when you reach age 73. Therefore, a person’s first RMD is due for the year he or she turns 73, in 2024. There is no RMD for 2023. Thus, the deadline for taking your first (initial) RMD would be April 1, 2025.
Example: Anthony will be celebrating his 72nd birthday on April 2, 2023, and has a traditional IRA. Due to SECURE 2.0 pushing the RMD age to 73, he can delay his RMD from his IRA for another year (2024). Anthony will now have to begin taking RMDs for 2024 when he reaches age 73. Anthony’s first RMD, for 2024, can be delayed until April 1, 2025, but then he will need to take two RMDs in 2025—both the (delayed) 2024 RMD and the 2025 RMD, which is due by December 31, 2025.
Comments
Armed Robbery Under The Cover Of Law.....
George Carlin was never so right as he was about the haves and haves nots.
"I spent 50% of my money on alcohol, women, and gambling. The other half I wasted.
Many, many people have IRAs, 401ks, etc. Unless you have your savings in a Roth plan, which is after tax, thus no tax is collected when you make withdrawals, you have a pre tax plan. You simply have to pay taxes when you make withdrawals. The only thing the new rules are doing is to change when you must make a MANDATORY withdrawal, clearly shown above. Failure to comply will cost you a hefty penalty.
I have no clue what the George Carlin statement was about as it applies to the topic.
I don't understand. If I read correctly, some people who are unaware will take minimum distributions that aren't required. No one who followed the old rules would be penalized. It's nice to know that those of us born after 1950 can shelter our investments from taxes a bit longer, but is that all we're saying here?
Carlin said the owners of this country is a big club and you and I aren’t in it. They figure out new ways to tax hard workers, then tax them again after death. (Inheritance tax). Lastly he said they’ll come after our SS.
"I spent 50% of my money on alcohol, women, and gambling. The other half I wasted.
While I enjoy George Carlin's humor, he has no place in this conversation.
Strange that you would insist on quoting Carlin as an apparent financial source. I may not be in the "big club", but, because of very prudent and persistent savings over 35++ years and fairly wise investments,I have managed to do very well and live a very comfortable life. Not having saved would not find me where I am today.
As for the government and its policies, they are simply inescapable, fair or not, they are what they are. I only made the OP to advise those that may be in the RMD time frame, to be aware of the 1/23 change to the rules, not debate the fairness, or lack thereof concerning taxation. I don't particularly like it either, but, they are what they are.
Not George Carlin, but a more respectable quote regarding money.
_Albert Einstein
“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.”
_
I'm still very confused as to why you, or any taxpayer, might not like this change. If you're coming from a "fairness" angle and are upset that "fat cats" who don't depend on distributions for living expenses get to avoid paying their "fair share", I suppose I can understand that argument, but somehow I don't think that's why you posted.
What am I missing?
How on earth did you come up with my liking or not liking this change??? My post was informational, no more, no less. It isn't about fairness, nor am I upset. I'm clueless as to how you could discern your position from my OP. I don't get the "fat cat" thing either...somebody else threw that nonsense into this thread. As threads tend to go, somebody is always taking things in a different direction for reasons unknown to me. This is also the reason I don't join into too many threads, they always, always go off the rails.
ONE more time, my post was for informational purposes only. I don't like or dislike the change, its a change, it isn't good or bad, its just the government changing the timing of an RMD. My post was CRYSTAL clear as to what its about. This isn't rocket science, don't read anymore into it. This has ZERO to do with fairness, its the law. "Fat cats" have to comply with this whether or not they depend on anything relating to their savings in the IRA or 401k etc arena. You CANNOT AVOID paying taxes, I cannot fathom how you came up with that!
Read my OP, where does it say ANYTHING, ANYTHING, relating to yours and other's posts about what I wrote?
I will refrain from further posts that relate to anything informational, it only leads to a waste of time posting over and over again over something so innocuous and having to explain something so incredibly simple as an IRS change to savings plans.
I will not post about this again.
Does this forum have a moderator? 🤔
....
Nope. Now's your chance.
Thanks, I'll take you up on the offer.
The first item I will attend to...
Adios, Showboat.....
🚫
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Ciao
It's Been Nice Knowing You Too.....
All Good Things Must Come To An End....
Yup
One last thing and then I'm DONE!
I understand that Texans say "YUP"
But, around here we say.....YEP!
It's YEP....not YUP.....
Don't anger the moderator....
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Yup
Typical Texan response to clear headed thinking....
I should know.....
My mother-in-law and The Lovely Mrs. Hydrant™ come from the same Texas stock.....
BULL HEADED PEOPLE...
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I didn't get to Texas until 2006
Stereotypes aren't footballs. You can't just go throwing them around.
Apologies if I misunderstood your intent. As I understand what you wrote, the only change is that people born from 1951 to 1959 can now defer RMDs for an extra year, and those of us born in 1960 or later can defer RMDs for three extra years. This obviously only effects those who don't need to use their tax deferred accounts for living expenses because they would already be withdrawing at least enough money to meet the RMD limits. I'm just curious how these changes would cause anyone to incur penalties.
George Brett
I just wanted to add that as this one has gone off the rails.
George Brett, Roger Clemens and Tommy Brady.
The OP was information only. Yes, there is a 25% penalty if you don't take the amount set as your RMD. There is a uniform life table that indicates what percentage of your pre-tax 401K, IRA, TSP that has to be taken based on your age and account balance whether you need it or not.