Have you taken your 2022 RMD re the possible passage of SECURE ACT 2.0?

RobbieB said:
Yeah, lot's of people don't know stuff, but even more dangerous is the people who know wrong stuff.

And the people who know wrong stuff like to spread it around unlike the people who don't know stuff.

Which explains the internet quite nicely me thinks.
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Yep!

It ain’t what you don’t know, it’s what you know for sure that just ain’t so!
 
Graybeard said:
I heard on the radio today that the SECURE Act 2.0 "could" be passed in the lame duck session of Congress.
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Before going into the "what if's" it's important to understand that while is it possible, it is not probable. There is a bunch of Must-Do stuff on the docket for congress to finish by EOY, and Secure not a high priority. In all the broader discussions of what's coming in this lame duck, it's not mentioned.
 
The $100,000 exemption for RMDs was/is(?) in the Senate's early version. If the Senate passes the House bill as presented, I doubt that exemption will carry through to law. My crystal ball is very cloudy.
 
Let's say the RMD is changed - you do not withdraw any unit lthen and each year you only take the minimum. This would mean that not only would the account grow larger, and the resulting RMD be larger, but possibly also a bigger "tax bomb" for heirs.
My advice is to ignore this, start draining the account a bit each year to "top off" your tax bracket (or Medicare bracket) and roll over to Roth. Then when RMDs start, keep "filling up the bracket even if it is ore than the RMS (been though you can only convert to Roth that amount over the RMD). Also, starting at 70 1/2, start using that account for all charitable donations (QCD) which will not only lower your eventual RMDs but you also do not have to pay any income taxes on this donation (but no tax write-off either).
 
Not intending to hijack the thread totally but I keep reading about this IRMAA deal...curious for my own DF situation...

MFJ with 66k of reportable SS and Pension income. His first RMD at 73 (he and DM both born October of 1951) would add 40k of taxable income, putting him at 106k of taxable earnings.

How will this impact his IRMAA?? I realize IRMAA impacts won't be until they are both 75. Unless its already impacting them at the 66k reportable earnings level??
 
kgtest said:
Not intending to hijack the thread totally but I keep reading about this IRMAA deal...curious for my own DF situation...

MFJ with 66k of reportable SS and Pension income. His first RMD at 73 (he and DM both born October of 1951) would add 40k of taxable income, putting him at 106k of taxable earnings.

How will this impact his IRMAA?? I realize IRMAA impacts won't be until they are both 75. Unless its already impacting them at the 66k reportable earnings level??
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The current IRMAA threshold for married couples is $194K. The additional premium would be $1581.60 per year for the two of them at that lowest level, and there are 4 additional levels with the highest kicking in at $750K of income.
 
cathy63 said:
The current IRMAA threshold for married couples is $194K. The additional premium would be $1581.60 per year for the two of them at that lowest level, and there are 4 additional levels with the highest kicking in at $750K of income.
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Got it! Thanks! Perfect explanation.
 
cathy63 said:
You have 60 days after withdrawal from an IRA to deposit the money in a Roth and have it treated as a conversion, subject to the one-rollover-per-year rule.

I am not sure if you can make the rollover deposit in a different calendar year, but I would suspect not.
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My understanding is that you cannot use RMD withdrawal funds for a Roth Conversion, e.g. if your RMD is $5K and you want to convert $5k to a Roth, you must withdraw $10k.
Are you saying I could take take a withdrawal of $5k to satisfy RMD and convert those same funds to a Roth within 60 days?
 
jazz4cash said:
My understanding is that you cannot use RMD withdrawal funds for a Roth Conversion, e.g. if your RMD is $5K and you want to convert $5k to a Roth, you must withdraw $10k.
Are you saying I could take take a withdrawal of $5k to satisfy RMD and convert those same funds to a Roth within 60 days?
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Not if you are subject to RMD. Cathy was referring to a case where someone ended up not being subject to RMD due to a new law.

The OP was hoping he might not be subject to RMD in 2022 if a new law is passed. But it doesn’t apply to him anyway.
 
Last edited:
- if you were born on or after January 1, 1959, your RMDs don't start until the year you turn 75.
- if you were born between January 1, 1957 and December 31, 1958, RMDs must begin the year you turn 74.
- if you were born between January 1, 1951 and December 31, 1956, RMDs must begin the year you turn 73.
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Although it doesn't match ages exactly, this throws a little bone to those of us who got our FRA adjusted by previous legislation.
 
audreyh1 said:
Not if you are subject to RMD. Cathy was referring to a case where someone ended up not being subject to RMD due to a new law.

The OP was hoping he might not be subject to RMD in 2022 if a new law is passed. But it doesn’t apply to him anyway.
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Ok, Thanks. I was pretty sure Cathy was correct and I was missing some context.
 
RobbieB said:
Yeah, lot's of people don't know stuff, but even more dangerous is the people who know wrong stuff.

And the people who know wrong stuff like to spread it around unlike the people who don't know stuff.

Which explains the internet quite nicely me thinks.
Click to expand...


Dunning Kruger Effect at work here perhaps?
-gauss
The Dunning-Kruger effect effect occurs when a person’s lack of knowledge and skills in a certain area cause them to overestimate their own competence. By contrast, this effect also causes those who excel in a given area to think the task is simple for everyone, and underestimate their relative abilities as well.
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Newly updated article from WSJ editors think it is about to pass.

Free link: https://www.wsj.com/articles/401k-c...l2bo67ogvya&reflink=desktopwebshare_permalink

Surprising to see the automatic enrollment aspect of this also.

Looks like the required Roth 401(k) distributions have been dropped. Since I've been doing my conversions within my 401(k), this is nice for me as I may not have to convert them to an IRA.

Congress is on the verge of passing a bill that aims to help Americans save more for retirement and leave their retirement savings untouched and untaxed for longer.
The bill nearing approval raises the age people are required to start withdrawing money from tax-deferred retirement accounts to 75 from 72. It increases retirement savings contribution limits for older workers and provides an increased incentive to people with low and moderate incomes to save in retirement accounts. It also paves the way for more employers to offer emergency savings accounts inside 401(k) plans.
Congress, which published the final details of the bill on Tuesday, is expected to pass the measure in the next few days as part of a larger year-end spending bill. President Biden is expected to sign it soon after.
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JoeWras said:
Newly updated article from WSJ editors think it is about to pass.

Free link: https://www.wsj.com/articles/401k-c...l2bo67ogvya&reflink=desktopwebshare_permalink

Surprising to see the automatic enrollment aspect of this also.

Looks like the required Roth 401(k) distributions have been dropped. Since I've been doing my conversions within my 401(k), this is nice for me as I may not have to convert them to an IRA.
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Thanks for the link Joe, that gives my Intermediate Bond Fund one more year to recover before I have to take any RMDs. :dance:
 
VanWinkle said:
Thanks for the link Joe, that gives my Intermediate Bond Fund one more year to recover before I have to take any RMDs. :dance:
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Let's watch this, though. It is "likely," but you never know with Congress.
 
From the article:

About 80% of people subject to mandatory retirement account distributions withdraw more than the required minimum because they need the money, said Mr. Slott.
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Makes me wonder who this change is really helping. If 80% need more than the RMD, they are probably already taking it out to spend, so they won't delay.

Those who don't need it, like many here, may already be withdrawing to make Roth conversions, so I guess we benefit by being able to make more conversions to let it grow tax free.

Ultimately, though, the tax man will get his rightful share, maybe just a little later.
 
Looks like they did not amend it to be retroactive as OP had hoped, so anyone who turned 72 in 2022 will still have to take an RMD this year.
 
Does anyone know where the text of the conferred and compromised bill is?
 
CardsFan said:
Makes me wonder who this change is really helping. If 80% need more than the RMD, they are probably already taking it out to spend, so they won't delay.

Those who don't need it, like many here, may already be withdrawing to make Roth conversions, so I guess we benefit by being able to make more conversions to let it grow tax free.

Ultimately, though, the tax man will get his rightful share, maybe just a little later.
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Extended Roth conversions are probably part of the strategy from the government side. And of course, the change just respects the reality of longevity changes.

There are plenty of things in the tax code that impact small populations.
 
Gumby said:
Secure 2.0 Act begins on page 2046. RMD age changes are on page 2085.
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Thanks, that helps.

Just browsing it I see a whole bunch of interesting little clean up things. The big one for those of us with Roth 401(k) accounts is they now are like Roth IRAs without the irritating differences.

There's other stuff. Looks like the government is as frustrated with IRA-to-IRA transfers as the rest of us. There are some assists in there (not sure it will work, but they are trying) to simplify the process and make it more bullet proof. Too many mistakes in that area with the IRS coming to hound people.

Also, there's "found money" clauses. Looks like Uncle Sam will be giving lost bond info to the states. For example: savings bond info past 3 years mature will be sent to the states. I presume for the "lost money" info sites each state has. You can be sure that [-]scammers[/-] entrepreneurs will be all over this. Same info goes to state for lost pensions.
 
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