Looks like Secure 2.0 will pass [emoji16]

[gayl]

So this means I can just let my IRA grow until 75! Will step up income in retirement by taking SSA this year & IRA at 75. Anyone else excited?

 

[qwerty3656]

As I approach retirement, it amazes me how much of it is managing taxable income (RMDs, ACA, Roth conversions, limiting taxes on Social Security) and I haven't even started looking at medicare stuff

 

[Richard4444]

Gosh, if this keeps on occurring - I may be able to wait until I am 100 until I begin my RMDs

Rich

 

[VanWinkle]

The RMD phase in seems very complicated, just the way congress likes it.

 

[MichaelB]

It appears “Secure 2.0”, more formally known as “Securing a Strong Retirement Act 2021” was voted out of the Ways and Neans committee and now is expected to get a vote by the House. A copy of the bill is here https://waysandmeans.house.gov/site...use.gov/files/documents/BILLS-117hr2954ih.pdf and here’s a media summary https://news.yahoo.com/secure-act-2...ee-and-moves-closer-to-passage-172143637.html

 

[REWahoo]

So I will turn 75 later this year, missing out on realizing any benefit from this legislation. I also missed out on the RMD change to 72. Reminds me of my working days when after 15 years with the company I finally qualified for a third week of vacation - the same year they reduced the qualification to 5 years.

Everyone is invited to my pity party.

 

[gayl]

Correction: I can only let my IRA grow until 73. Ah well. I knew the IRS would want their cut

"SEC. 105. INCREASE IN AGE FOR REQUIRED BEGINNING DATE FOR MANDATORY DISTRIBUTIONS.
‘‘(I) In the case of an individual who attains age 72 after December 31, 2021, and age 73 before January 1, 2029, the applicable age is 73."

 

[audreyh1]

Secure 2.0 increases the RMD age further to 73 starting on Jan. 1, 2022; to 74 starting on Jan. 1, 2029; and 75 starting on Jan. 1, 2032.

So it’s going to be 73 for those born 1950 or later starting next year, 74 for those born in 1956* or later starting in 2029, and 75 for those born in 1958 or later.

*Someone born in 1955 will turn 73 in 2028, so they would still be subject to RMD starting that year instead of 74.

 

[GravitySucks]

Now I'll be able to bring more with me when I die!

 

[Time2]

So it’s going to be 73 for those born 1950 or later starting next year, 74 for those born in 1956* or later starting in 2029, and 75 for those born in 1958 or later.

*Someone born in 1955 will turn 73 in 2028, so they would still be subject to RMD starting that year instead of 74.

That's me born in 1955.
Oh well, at least I get one more year for Roth Conversions without RMDs.
My young bride will get to wait until 75!
Now, how do I split the Roth conversions to minimize the amount left in IRAs? Maybe it doesn't matter which one of us has what amount left in their IRA account.

 

[PageTwo]

Thanks to this forum and the education it's provided me, I plan to convert all my pre-tax 401K into a Roth IRA in yearly manageable chunks and be done before I'm forced to take any RMDs... I'm able to start early thanks to the "rule of 55" which applies to my 401K.

 

[audreyh1]

That's me born in 1955.
Oh well, at least I get one more year for Roth Conversions without RMDs.
My young bride will get to wait until 75!
Now, how do I split the Roth conversions to minimize the amount left in IRAs? Maybe it doesn't matter which one of us has what amount left in their IRA account.

Same with us. DH will just miss 74 as he was born in 1955, I will just make the 75 year.

 

[audreyh1]

Thanks to this forum and the education it's provided me, I plan to convert all my pre-tax 401K into a Roth IRA in yearly manageable chunks and be done before I'm forced to take any RMDs... I'm able to start early thanks to the "rule of 55" which applies to my 401K.

I think you can do Roth conversions before 55. Has naught to do with Rule of 55.

 

[Huston55]

Thanks to this forum and the education it's provided me, I plan to convert all my pre-tax 401K into a Roth IRA in yearly manageable chunks and be done before I'm forced to take any RMDs...

Why "chunks?" Can't you just do a Mega-Back Door conversion? That's what I did.

 

[chassis]

Is an updated RMD divisor calculator published for the proposed revised RMD age change?

I ran a quick calculation in my model with age 75 RMD using the same divisors as age 72, and it didn’t change my net worth balance much at end of planned life expectancy. This is to be expected, a regulation change that gets headlines but the real effect is small.

 

[Time2]

Thanks to this forum and the education it's provided me, I plan to convert all my pre-tax 401K into a Roth IRA in yearly manageable chunks and be done before I'm forced to take any RMDs... I'm able to start early thanks to the "rule of 55" which applies to my 401K.

I started converting our tIRAs, but I want to stay in the 12% tax bracket while I do that. This year I was able to convert $75k. The first world problem I have is, it's been growing faster than I can take it out!

 

[qwerty3656]

Why "chunks?" Can't you just do a Mega-Back Door conversion? That's what I did.

You would do "chunks" to stay in a lower tax bracket (I think)

 

[Huston55]

Thanks to this forum and the education it's provided me, I plan to convert all my pre-tax 401K into a Roth IRA in yearly manageable chunks and be done before I'm forced to take any RMDs... I'm able to start early thanks to the "rule of 55" which applies to my 401K.

Why "chunks?" Can't you just do a Mega-Back Door conversion? That's what I did.

You would do "chunks" to stay in a lower tax bracket (I think)

That makes sense if: (1) your 401k Plan Description will allow it and, (2) any tax savings are worth the effort. For me, my Plan Description allowed the Mega-Back Door conversion but, only once. Also remember that tax is due on only the "earnings", which must follow their original associated Post-Tax 401k contributions. So, perhaps, the tax on the earnings might not be large enough for you want to do it twice. YMMV.

 

[youbet]

So I will turn 75 later this year, missing out on realizing any benefit from this legislation. I also missed out on the RMD change to 72. Reminds me of my working days when after 15 years with the company I finally qualified for a third week of vacation - the same year they reduced the qualification to 5 years.

Everyone is invited to my pity party.

Ditto here on missing the benefit of the RMD changes!

 

[MichaelB]

So I will turn 75 later this year, missing out on realizing any benefit from this legislation. I also missed out on the RMD change to 72. Reminds me of my working days when after 15 years with the company I finally qualified for a third week of vacation - the same year they reduced the qualification to 5 years.

Everyone is invited to my pity party.

Ditto here on missing the benefit of the RMD changes!

Let’s all commiserate together over a pint.

While I missed all these breaks, and also the health care ones, I’m still retired, and quite happy to be here.

 

[easysurfer]

Looks both ways ... Good, guess I can procrastinate a bit more .

 

[audreyh1]

Is an updated RMD divisor calculator published for the proposed revised RMD age change?

I ran a quick calculation in my model with age 75 RMD using the same divisors as age 72, and it didn’t change my net worth balance much at end of planned life expectancy. This is to be expected, a regulation change that gets headlines but the real effect is small.

I don’t think one is needed. You just use your age each year. People starting later skip a few years.

 

[jollystomper]

So it’s going to be 73 for those born 1950 or later starting next year, 74 for those born in 1956* or later starting in 2029, and 75 for those born in 1958 or later.

Ding! Ding! Ding! I am a WINNAR!

Will update my RMD withdrawal spreadsheet models after I finish celebrating .

 

[SecondCor521]

I think you can do Roth conversions before 55. Has naught to do with Rule of 55.

Yes, you can do Roth conversions as long as you (a) have a (non-inherited) traditional IRA with money in it and (b) are willing to pay the associated income tax.

Is an updated RMD divisor calculator published for the proposed revised RMD age change?

I ran a quick calculation in my model with age 75 RMD using the same divisors as age 72, and it didn’t change my net worth balance much at end of planned life expectancy. This is to be expected, a regulation change that gets headlines but the real effect is small.

I think what someone else said about just using the existing table at whatever age you are when you are taking an RMD is correct. The bigger benefit (and perhaps not particularly big) is being able to skip the RMD and let your tax deferred growth proceed unaffected for three more years.

Depending on your current age and IRA balance, it may not make that much of a difference to you. It would probably have a larger effect on younger people with large IRA balances who don't need to take it. So not really a great winner of an idea at the end of the day, but I'll take it.

On further thought, it'll enable three more years of Roth conversions for me, which are currently appealing but by then may not be as beneficial if they change the rules more.

 

[audreyh1]

Ding! Ding! Ding! I am a WINNAR!

Will update my RMD withdrawal spreadsheet models after I finish celebrating .

Oops, I didn’t finish my post - 2032 is when RMD age increases to 75.