Retirement planning rules don’t always make headlines, but when they change, the effects can be significant. A proposed change to Required Minimum Distribution (RMD) rules could give some retirees additional flexibility in managing their retirement accounts and taxes.
In a recent NJ Money Help article, Howard Hook, CFP®, CPA, CAP®, discusses proposed legislation to gradually raise the age at which individuals must begin taking Required Minimum Distributions (RMDs) from traditional IRAs and other qualified retirement accounts.
The proposed “Securing a Strong Retirement Act” passed the House of Representatives on March 29 with strong bipartisan support. The bill still needs Senate approval and could be modified before becoming law.
Howard explains that the bill would gradually increase the RMD age from 72 to 75 over several years. When asked whether raising the RMD age would be beneficial, Howard notes that the answer is generally yes.
For individuals who do not need retirement account withdrawals to cover living expenses, delaying RMDs allows assets to remain invested longer and postpones the income taxes associated with those distributions. He also points out that investors who need access to their retirement savings can still take withdrawals before RMDs are required, since the RMD represents a minimum distribution amount rather than a limit.
Read the full article on NJMoneyHelp.com to learn more about the proposed changes and how they could affect retirement planning – Will Congress Raise the Age for Taking Money from an IRA?
