Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
RMD going to 72?
Old 04-02-2019, 08:52 AM   #1
Thinks s/he gets paid by the post
zinger1457's Avatar
 
Join Date: Jul 2007
Posts: 1,952
RMD going to 72?

Not a huge change but a bipartisan bill going through the house and senate would raise the RMD age to 72.


https://finance.yahoo.com/news/bipar...125240433.html


Quote:
The bill would raise the age at which people are required to take distributions from their retirement plan to 72, up from 70.5 years. It would also allow long-term part-time workers to participate in 401(k) plans.
__________________

zinger1457 is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 04-02-2019, 09:03 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 21,552
I'd take it! Give us a couple more years to have lower taxes.

We'd be drawing SS anyway starting 70, so that will probably push us out of the 12% tax bracket already.
__________________

__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 04-02-2019, 09:09 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 7,401
Yeah, I'll be drawing SS by 70 as well, so I'm not sure this does much for me, but some might appreciate the flexibility. I'm hoping to fully convert my tIRA before RMDs, and at first I thought this would give me another 18 months, but with SS income I don't see the advantage for myself.
RunningBum is offline   Reply With Quote
Old 04-02-2019, 09:19 AM   #4
Full time employment: Posting here.
 
Join Date: Aug 2014
Posts: 892
I'll take it. That would give us a couple more years of Roth Conversions at lower taxes. Every little bit helps.
CRLLS is online now   Reply With Quote
Old 04-02-2019, 09:21 AM   #5
Thinks s/he gets paid by the post
38Chevy454's Avatar
 
Join Date: Sep 2013
Location: Cincinnati, OH
Posts: 2,116
Quote:
Originally Posted by CRLLS View Post
I'll take it. That would give us a couple more years of Roth Conversions at lower taxes. Every little bit helps.

That's probably the biggest advantage if you have a large portion of pre-tax IRA funds.
__________________
The advice we're giving you is invaluable, that's why it's free
Experience is a good teacher, but the tuition can get expensive real fast

Semi-Retired 7/1/16: working part-time (60%) for now [4/24/17 changed to 80%]
Retired Aug 2, 2017; age 53
38Chevy454 is offline   Reply With Quote
Old 04-02-2019, 09:43 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 21,552
I notice it doesn't say anything about any changes in the rate chart for how much you must withdraw annually by age.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 04-02-2019, 09:49 AM   #7
Thinks s/he gets paid by the post
 
Join Date: Nov 2011
Posts: 2,954
I'm holding out for age 72.25.
GrayHare is offline   Reply With Quote
Old 04-02-2019, 09:57 AM   #8
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,482
Quote:
Originally Posted by audreyh1 View Post
I notice it doesn't say anything about any changes in the rate chart for how much you must withdraw annually by age.
Is your thought that they’d chop off the first two ‘Distribution Periods’ and use the remainder of the age/rate chart?
Attached Images
File Type: jpg F79E4E8D-8906-46ED-A59E-BAA3DA562132.jpg (488.6 KB, 177 views)
__________________
You may be whatever you resolve to be.

100% x 10% > 10% x 100%
Huston55 is offline   Reply With Quote
Old 04-02-2019, 09:59 AM   #9
Thinks s/he gets paid by the post
Golden sunsets's Avatar
 
Join Date: Jun 2013
Posts: 1,207
That would be great for us. This is the year of the tax torpedo for us. I turned 70 this past 12/1 and started collecting SS on my own record. And this year, my RMD's kick in for me too, which in addition to increasing our taxes, will mean that we are once again subject to IRMAA, after a multi year reprieve since I retired. But I think I'd only be able to defer the dreaded RMD for one year, as I turn 72 next 12/1.
__________________
"Luck favors the prepared mind"
Pasteur
Golden sunsets is online now   Reply With Quote
Old 04-02-2019, 10:00 AM   #10
Full time employment: Posting here.
 
Join Date: Jun 2016
Posts: 602
If I were emperor, remove RMDs for the original account holder and spouse. Any non-spouse heirs would be required to RMD based on the heirs age when they inherit it.
Spock is offline   Reply With Quote
Old 04-02-2019, 10:07 AM   #11
Full time employment: Posting here.
 
Join Date: Aug 2014
Posts: 892
Quote:
Originally Posted by Spock View Post
If I were emperor, remove RMDs for the original account holder and spouse. Any non-spouse heirs would be required to RMD based on the heirs age when they inherit it.
I'd vote for you.
CRLLS is online now   Reply With Quote
Old 04-02-2019, 10:08 AM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 21,552
Quote:
Originally Posted by Huston55 View Post
Is your thought that they’d chop off the first two ‘Distribution Periods’ and use the remainder of the age/rate chart?
That would be my assumption as I think it's based on mortality rates or whatever you call it.

However, I don't believe the chart has been updated with current statistics, in other words it is quite outdated in terms of US longevity.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 04-02-2019, 10:11 AM   #13
Thinks s/he gets paid by the post
Huston55's Avatar
 
Join Date: Jul 2011
Location: The Bay Area
Posts: 2,482
Quote:
Originally Posted by audreyh1 View Post
That would be my assumption as I think it's based on mortality rates or whatever you call it.

However, I don't believe the chart has been updated with current statistics, in other words it is quite outdated in terms of US longevity.
That was my thought, that a new updated chart would be appropriate.
__________________
You may be whatever you resolve to be.

100% x 10% > 10% x 100%
Huston55 is offline   Reply With Quote
Old 04-02-2019, 10:16 AM   #14
Thinks s/he gets paid by the post
steelyman's Avatar
 
Join Date: Feb 2011
Location: NC Triangle
Posts: 3,860
That table has the same entry for age 70 (27.4) that I used back in 2015 or so when doing some projections involving RMDs.
__________________

steelyman is offline   Reply With Quote
Old 04-02-2019, 10:26 AM   #15
Full time employment: Posting here.
 
Join Date: Aug 2014
Posts: 892
Quote:
Originally Posted by Huston55 View Post
Is your thought that they’d chop off the first two ‘Distribution Periods’ and use the remainder of the age/rate chart?
That would be correct IMO. I don't think they are updating life expectancy. The actual text of the bill reads with respect to the RMD's, in part:


Quote:
ACTUARIAL ADJUSTMENT.—Section 401(a)(9)(C)(iii) of such Code is amended by striking ‘‘age 70 1⁄2’’ each place it appears and inserting ‘‘age 72’’.


Unfortunately those who already have met age 70-1/2 do not get to reset the clock.

Quote:
(e) 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 70 1⁄2 after such date.
CRLLS is online now   Reply With Quote
Old 04-02-2019, 10:34 AM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 21,552
Quote:
Originally Posted by steelyman View Post
That table has the same entry for age 70 (27.4) that I used back in 2015 or so when doing some projections involving RMDs.
I think it's at least 10 years old. Maybe way older. I have seen the same numbers for a loooooong time.

OK - it looks like the chart was last updated in 2002.
__________________
Retired since summer 1999.
audreyh1 is online now   Reply With Quote
Old 04-02-2019, 10:42 AM   #17
Thinks s/he gets paid by the post
 
Join Date: Jul 2002
Posts: 1,207
I sure hope it passes as it sounds custom tailored for me. I turn 70 late December this year. I sure would like two more years to do more conversions now that I've resigned all seasonal part time gigs.
RE2Boys is offline   Reply With Quote
Old 04-02-2019, 10:55 AM   #18
Thinks s/he gets paid by the post
Car-Guy's Avatar
 
Join Date: Aug 2013
Location: Citizen of Texas
Posts: 3,171
That's good (not great) news. (If they don't up the RMD % at 72) Personally I rather see them eliminate RMD's altogether. Just pay the taxes when it's taken out by you or your heirs.

Or even better, just eliminate the tax altogether. (Which would have been a good April Fools joke if I were posting this yesterday.)
Car-Guy is offline   Reply With Quote
Old 04-02-2019, 11:15 AM   #19
Moderator Emeritus
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 41,841
For me, it would not have made the slightest difference. I was withdrawing an amount equivalent to an RMD from my TSP when I was retired but only in my 60's. Thus I was leaning more heavily on the TSP and more lightly on taxable for my living expenses, than I otherwise might have done.

The objective was to lower my TSP balance at least a little bit to help deal with the upcoming "tax torpedo" when I turned 70 and started getting higher SS plus RMD's. It worked. Even so, the tax torpedo was awful enough! I can't imagine the tax hit I would have taken, had I not done this in advance.

Now that I am 70 (soon to be 71), if they change the RMD age, so what. I will just continue withdrawing as always.
W2R is offline   Reply With Quote
RMD going to 72?
Old 04-02-2019, 11:52 AM   #20
Thinks s/he gets paid by the post
steelyman's Avatar
 
Join Date: Feb 2011
Location: NC Triangle
Posts: 3,860
RMD going to 72?

I think what I’m doing is similar to W2R’s approach. Taking withdrawals now although the IRS-mandated withdrawal is still a way off. The denominator I use is derived from their table but adjusted forward and lowered by 1 each year, which means a gradual raise in portfolio percentage withdrawn. It’s an individual decision.

The result is a very small fraction (compared to 4%). I don’t expect much from SS and don’t think I’ll have a big tax torpedo. Changes in age don’t affect the approach much if at all unless they radically change the actuarial life expectancies.

[ADDED] I wonder what effect this has on QCD (qualified charitable distributions). It would seem to delay their use.
__________________

__________________

steelyman is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Going back to college at 65, and going Greek as well SumDay Life after FIRE 6 03-16-2013 08:04 PM
Going, Going, Gone? CitizenK Hi, I am... 24 04-10-2012 04:00 PM
Wamu ~ going, going.... VaCollector Stock Picking and Market Strategy 8 09-25-2008 10:36 PM
IRA RMD Stuff TromboneAl FIRE and Money 12 02-15-2006 06:08 AM
Did you miss the RMD last year? mickeyd Life after FIRE 4 01-14-2005 09:07 AM

» Quick Links

 
All times are GMT -6. The time now is 07:36 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.