Take Note of This Tax Law Change
Throughout the years, you’ve focused on accumulating savings within your retirement account. But after you retire, your focus should shift toward a withdrawal strategy that helps your income to last as long as possible. And to that end, the IRS occasionally changes their withdrawal rules a bit. Retirees should take note of these changes so that they can adjust their withdrawal strategy appropriately.?
While withdrawals can begin any time after age 59 ?, many retirees try to wait as long as possible in order to preserve their retirement account balances (and allow them to grow a bit more). But once you reach age 72, must begin taking required minimum withdrawals (called RMDs).?
RMD amounts are determined by actuarial tables that are based upon your life expectancy.? And since lifespans do change according to data, the IRS sometimes updates those tables.?
This year, the IRS has issued changes to RMDs that allow for slightly smaller withdrawals. These rules affect the following types of accounts:
Do note that Roth IRAs are not subject to RMD rules.?
Thanks to smaller RMDs, retirees can keep a bit more money in their retirement accounts if desired. So those who are concerned about having retirement income to support a longer lifespan might wish to adjust their withdrawals downward.?
But before you make any changes to your withdrawal strategy,? we Ido urge you to meet with meus. IWe must calculate your RMD accurately in order to avoid potential penalties for taking the wrong amounts. Let’s discuss your strategy at our next meeting.?