Proposed RMD Rules Would Trim Mandated Distributions for Retirees
Ways to get your voice heard on possible new life expectancy tables that would affect your money.
Last fall, the Trump Administration issued an executive order that directed the Treasury Department to review the rules for required minimum distributions from qualified retirement plans. Retirement Report readers have been anxiously awaiting news since then. Finally, more than a year later, there is a new development to report: The IRS has issued new proposed life expectancy tables to calculate RMDs.
The new tables take into account longer life expectancies. The current tables stop at age 115+, but the new ones run an extra five years, to 120+. These are the first changes made to the tables since 2002.
What do the new tables mean in practice? When calculating RMDs under the proposed rules, the life expectancy factors would be higher, which means an account owner would take out a smaller amount, leaving more money to grow tax-deferred in the retirement account. For instance, the current factor for someone who is age 71 is 26.5, whereas the proposed rules would set that factor at 28.2. That change means a 71-year-old with a $1 million IRA would be required to take out nearly $2,300 less.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The new tables are not a done deal just yet. The proposed regulations must still go through a few more regulatory steps before they can be finalized. If they stay on track through that process, the new rules would be used to calculate 2021 RMDs. Proceed as usual with the current rules for 2019 and 2020 RMDs.
If you want to share your thoughts about these proposed RMD changes, you can submit a comment until January 7, 2020. To do so, and to learn more about the changes, go to federalregister.gov and search for document number 2019-24065.
The public hearing is scheduled for January 23, 2020.
-
Stock Market Today: Bitcoin, Boeing Shine as Stocks Slip
Digital World Acquisition sizzled, too, ahead of tomorrow's merger with Trump Media & Technology Group.
By Karee Venema Published
-
Stellantis Recalls 285K Vehicles Over Airbag Problems
Defective airbag inflators on certain Chrysler and Dodge vehicles could rupture and cause injury or death, NHTSA says.
By Joey Solitro Published
-
403(b) Contribution Limits for 2024
retirement plans Teachers and nonprofit workers can contribute more to a 403(b) retirement plan in 2024 than they could in 2023.
By Jackie Stewart Published
-
SEP IRA Contribution Limits for 2024
SEP IRA A good option for small business owners, SEP IRAs allow individual annual contributions of as much as $69,000 a year.
By Jackie Stewart Published
-
Roth IRA Contribution Limits for 2024
Roth IRAs Roth IRA contribution limits have gone up for 2024. Here's what you need to know.
By Jackie Stewart Published
-
SIMPLE IRA Contribution Limits for 2024
simple IRA The maximum amount workers at small businesses can contribute to a SIMPLE IRA increased by $500 for 2024.
By Jackie Stewart Published
-
457 Contribution Limits for 2024
retirement plans State and local government workers can contribute more to their 457 plans in 2024 than in 2023.
By Jackie Stewart Published
-
Roth 401(k) Contribution Limits for 2024
retirement plans The Roth 401(k) contribution limit for 2024 is increasing, and workers who are 50 and older can save even more.
By Jackie Stewart Published
-
Is a Medicare Advantage Plan Right for You?
Medicare Advantage plans can provide additional benefits beneficiaries can't get through original Medicare for no or a low monthly premium. But there are downsides to this insurance too.
By Jackie Stewart Published
-
What You Must Know About the Different Parts of Medicare
Medicare Medicare can be complicated but we've got you covered. Here is a quick guide to the different benefits provided through each part.
By Jackie Stewart Last updated