The Secure Act 2.0

[retiredguy123]

Under current law, if you turned 72 in 2022, you must take your first RMD (required minimum distribution) from your retirement account by April 1, 2023. However, there is a bill in Congress that has a good chance to pass this year, called the Secure Act 2.0. That law would raise the age for starting your RMDs from 72 to 73. So, if you haven't yet taken your first RMD, you may want to wait at least until the end of the year to see if the law is enacted. Note, that, if the law doesn't pass, and you wait until after December 31, 2022 to take the RMD, you will need to take two taxable RMDs in 2023, one for 2022 and another RMD for 2023, which will need to be taken by December 31, 2023. Both RMDs would be taxed as income in 2023.

[Altavia]

Thanks for the heads up!

[Stu from NYC]

Was nice to defer taxes up to now

[MrFlorida]

Thanks for the tip .

[HandyGrandpap]

thanks, keep us posted regarding 2.0

[retiredguy123]

thanks, keep us posted regarding 2.0
The bill passed the House in March by a vote of 414 to 5. It is expected to be voted on in the Senate before the end of the year.

[alwann]

Wasn't the RMD suspended last year because of COVID? Would be nice to do that this year as well in consideration of 401k account losses for many of us.

[Hape2Bhr]

Wasn't the RMD suspended last year because of COVID? Would be nice to do that this year as well in consideration of 401k account losses for many of us.

Loses could have been avoided by investing similar to the Speaker of the House family.

[retiredguy123]

Update - It looks like the Secure Act 2.0 will be included in the new spending bill that is expected to be passed in Congress before Christmas. However, it doesn't appear as though the RMD requirement will affect those who turned 72 in 2022. Here is what I recently read about the bill:

"As currently written, the Securing a Strong Retirement Act of 2022 establishes a sliding scale for RMDs. Instead of 72 serving as the default age when minimum distributions start, RMDs would begin according to the following schedule:

Age 73 for people who turn 72 after Dec. 31, 2022, and 73 before Jan. 1, 2030
Age 74 for people who turn 73 after Dec. 31, 2029, and 74 before Jan. 1, 2033
Age 75 for people who turn 74 after Dec. 31, 2032"

So, it appears that, if you turned 72 in 2022, the new rules will not affect you, and you need to take your first RMD in 2022, or by March 31, 2023. But, if you delay it into 2023, you will then need to take a second RMD in the same year, which could raise your tax rate. Hopefully, there will be more news this week to clarify the new RMD rules.

[Badger 2006]

Under current law, if you turned 72 in 2022, you must take your first RMD (required minimum distribution) from your retirement account by April 1, 2023. However, there is a bill in Congress that has a good chance to pass this year, called the Secure Act 2.0. That law would raise the age for starting your RMDs from 72 to 73. So, if you haven't yet taken your first RMD, you may want to wait at least until the end of the year to see if the law is enacted. Note, that, if the law doesn't pass, and you wait until after December 31, 2022 to take the RMD, you will need to take two taxable RMDs in 2023, one for 2022 and another RMD for 2023, which will need to be taken by December 31, 2023. Both RMDs would be taxed as income in 2023.

You may want to investigate converting to a Roth IRA. Taxes will have to be paid on the withdrawal so how that amount will affect your tax bracket needs analysis. Also best to pay the tax amount with non IRA funds, as the new Roth will grow tax free with no mandatory withdrawals. You can take out what you want when you want, tax free. May not work for many, but 6 years ago, prior to becoming 70 1/2 it worked great for me.