RMD going to 72?

VanWinkle said:
I am curious if QCDs will now have to wait to age 72 for those taking first RMD at 72. QCD is qualified charitable distribution from an IRA.
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My understanding is that QCDs will still be available once you turn 70.5. It would require a normal distribution that is not an RMD since the RMD age will bump to 72.
 
I'm trying to avoid re-reading 34 pages. Does anybody know the new age 72 RMD factor for the first year under the new law? I think the old 70 1/2 factor was 3.65% for the first year, but I "think" the tables were updated recently with new mortality figures?

Thanks.
 
PatrickA5 said:
I'm trying to avoid re-reading 34 pages. Does anybody know the new age 72 RMD factor for the first year under the new law? I think the old 70 1/2 factor was 3.65% for the first year, but I "think" the tables were updated recently with new mortality figures?

Thanks.
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Ignore my question. I see that the tables haven't actually changed yet and are only an IRS proposal right now that might take affect in 2021.

https://www.kiplinger.com/article/r...-rmd-rules-winnow-mandated-distributions.html
 
^^^^ That's silly. It changed from 70 1/2 to 72.... it's not like that extra 1 1/2 years is going to make much of a dent in the exodus of money.

IMO it was just a small bone to offset the changes in RMDs for non-spousal beneficiaries.
 
pb4uski said:
^^^^ That's silly. It changed from 70 1/2 to 72.... it's not like that extra 1 1/2 years is going to make much of a dent in the exodus of money.

IMO it was just a small bone to offset the changes in RMDs for non-spousal beneficiaries.
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Yup minor difference at best. Most folks outside this forum take more than the minimum anyways.
Even many folks here take TIRA distributions at 70, so it depends if it was naturally less than 3.65% the first year and so on....
 
It does not appear the IRS has updated the RMD table yet for this change. Unfortunately, I turned 70.5 before the end of this year and have been taking distributions to meet that amount throughout 2019. I assume with this change, I will only being able to defer RMD for 2020 and will need to restart RMD in 2021.
 
DFW_M5 said:
It does not appear the IRS has updated the RMD table yet for this change. Unfortunately, I turned 70.5 before the end of this year and have been taking distributions to meet that amount throughout 2019. I assume with this change, I will only being able to defer RMD for 2020 and will need to restart RMD in 2021.
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You must turn 70.5 in 2020 to get the 72 age RMDs. You will need to take a 2020 RMD also.
 
VanWinkle said:
You must turn 70.5 in 2020 to get the 72 age RMDs. You will need to take a 2020 RMD also.
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I assumed that was for those that would just be starting their first RMD, but it's not clear to me and makes no sense why I would not be able to skip at least one year of RMD.
 
DFW_M5 said:
I assumed that was for those that would just be starting their first RMD, but it's not clear to me and makes no sense why I would not be able to skip at least one year of RMD.
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You can't skip a year of RMDs because the new law prohibits that by stating that the age increase applies only to people who turn 70 1/2 in 2020 or later. Here's the actual text.
SEC. 114. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY DISTRIBUTIONS.
(a) In General.—Section 401(a)(9)(C)(i)(I) of the Internal Revenue Code of 1986 is amended by striking “age 70½” and inserting “age 72”.

(b) Spouse Beneficiaries; Special Rule For Owners.—Subparagraphs (B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each amended by striking “age 70½” and inserting “age 72”.

(c) Conforming Amendments.—The last sentence of section 408(b) of such Code is amended by striking “age 70½” and inserting “age 72”.

(d) Effective Date.—The amendments made by this section shall apply to distributions required to be made after December 31, 2019, with respect to individuals who attain age 70½ after such date.​
 
I was talking to DW about the SECURE act and how it might impact us. I thought about trying to model it (just the RMD change impact). We are 61/59. We will be converting to ROTH some over the next few years, maybe up to the 22% bracket. Who knows what tax rate will do and who knows how our portfolio will perform and who knows if we will be worm food by then.

Instead of futzing with spreadsheets, I decided to do a sudoku by the fire instead. :)

I think the RMD change to our finances will minimal.
 
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VanWinkle said:
You must turn 70.5 in 2020 to get the 72 age RMDs. You will need to take a 2020 RMD also.
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cathy63 said:
You can't skip a year of RMDs because the new law prohibits that by stating that the age increase applies only to people who turn 70 1/2 in 2020 or later. Here's the actual text.
SEC. 114. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY DISTRIBUTIONS.
(a) In General.—Section 401(a)(9)(C)(i)(I) of the Internal Revenue Code of 1986 is amended by striking “age 70½” and inserting “age 72”.

(b) Spouse Beneficiaries; Special Rule For Owners.—Subparagraphs (B)(iv)(I) and (C)(ii)(I) of section 401(a)(9) of such Code are each amended by striking “age 70½” and inserting “age 72”.

(c) Conforming Amendments.—The last sentence of section 408(b) of such Code is amended by striking “age 70½” and inserting “age 72”.

(d) Effective Date.—The amendments made by this section shall apply to distributions required to be made after December 31, 2019, with respect to individuals who attain age 70½ after such date.​
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target2019 said:
It's not allowed to start and stop RMD.
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I wonder how this will effect the RMD table once it is revised. I guess there will need to be more than one RMD table to accommodate this change. At least DW will get some small benefit from this change, but the heirs certainly will not.
 
DFW_M5 said:
I wonder how this will effect the RMD table once it is revised. I guess there will need to be more than one RMD table to accommodate this change. At least DW will get some small benefit from this change, but the heirs certainly will not.
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The earliest date the new table could go into effect is 2021 and by then everyone who needed to take age 70/71 RMDs will already be 72 or older, so they can just start the new table at 72. That's really the only effect of raising the starting RMD age. The factors themselves don't change. You can see them here: https://www.kitces.com/current-vs-new-uniform-lifetime-table-rmd-as-a-percentage-of-account-balance/

The old table has to stay available no matter what, because people who failed to take RMDs when they should have will need it to figure penalties owed for years prior to 2021.
 
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