Personal Finance

Those annoying required withdrawals from your IRAs just got changed

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It’s the bane of some older Americans. Once they hit a certain age, the government makes them take money out of their retirement accounts, even if they don’t need the cash.

That is changing, albeit slowly.

The recently passed Secure Act raises the age for when those required minimum withdrawals must begin — to 72 from 70½, effective this year. Meanwhile, updated life expectancy tables proposed by the IRS for 2021 would also change how RMDs are calculated.

“The age change is a small thing, but helpful,” said certified financial planner Mark Wilson, president of MILE Wealth Management in Irvine, California.

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And, he said, “Using longer life expectancy calculations would make the minimum amount you have to take a little smaller.”

RMDs apply to 401(k) plans — both traditional and the Roth version — and similar workplace plans, as well as most individual retirement accounts (Roth IRAs do not come with required withdrawals until after the account owner’s death).

Be aware that although the Secure Act raised the RMD age, people who reached age 70½ before 2020 still must take their RMDs. Reach that age after 2019, and you can wait until you’re 72 under the new rule.

“If you reached age 70½ before this year, it’s business as usual for you,” said CPA Jeffrey Levine, CEO…



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