Looks like Secure 2.0 will pass [emoji16]

[Graybeard]

Unfortunately you are wrong.

I'm pretty sure that you have to start RMDs this year as future age changes won't affect that. You still have to take your first RMD this year and yearly thereafter.

In other words, RMD starting age is currently 72. If you are 72 in 2021 then you have to start this year. It doesn't matter if you turn 73 in 2022.

For those turning 72 in 2022, under the new law they could wait a year because they wouldn't turn 73 until 2023.

Audrey I was born in 1950 so I am 71 this year. I'm 72 next year so my 1st RMD would be in 2022 using the 12/31/2021 account balance. No way I'd wait to 2023 and have to do 2 RMDs that year, this 1st RMD will double my current income!

ETA - when the RMD age was 70 1/2 I reached that age in early 2021, that's why I said my 1st RMD would have been in 2021. That half year was crazy, making it an even age is much clearer.

 

[Graybeard]

This bill that's being discussed in this thread has not passed or been signed into law. The current starting age for RMDs is 72, so if you were born in 1950, you must withdraw the first RMD by 4/15/2023 (based on 12/31/2021 account values) and the second by 12/31/2023 (based on 12/31/2022 account values). Usually people don't want to take two RMDs in one year, so they withdraw the first one in the calendar year when they turn 72.

When you calculate your RMD, you will use the new tables that go into effect in 2022. Here's a comparison of the old and new tables: https://static.fmgsuite.com/media/documents/62a03f4e-4470-466d-ab38-c2d1850bfc7d.pdf Your first RMD will be 3.65% of your account value, same as it would have been before, but you're starting two years later. This assumes that your IRA beneficiary is not a spouse who is more than 10 years younger than you. If you do have a much younger spouse, you would use a different lookup table.

That's interesting. Since the RMD was pushed out 1 1/2 years I assumed the 1st RMD percentage would be like the 2nd or 3rd year's percentage from the 70 1/2 tables so I was assuming around 4% or 4.24% taking a WAG.

Thank you.

 

[audreyh1]

Audrey I was born in 1950 so I am 71 this year. I'm 72 next year so my 1st RMD would be in 2022 using the 12/31/2021 account balance. No way I'd wait to 2023 and have to do 2 RMDs that year, this 1st RMD will double my current income!

ETA - when the RMD age was 70 1/2 I reached that age in early 2021, that's why I said my 1st RMD would have been in 2021. That half year was crazy, making it an even age is much clearer.

OK - good. I misunderstood and thought you had to take your RMD this year as you were turning 72.

So yes - if they do pass with the new ages in 2022 you would get to skip one more year.

That's interesting. Since the RMD was pushed out 1 1/2 years I assumed the 1st RMD percentage would be like the 2nd or 3rd year's percentage from the 70 1/2 tables so I was assuming around 4% or 4.24% taking a WAG.

Right, the updated tables going into effect next year give you another break!