Required Minimum Distributions from Retirement Accounts Can Now be Delayed Until After You Are 72
At the very end of last year Congress and the President made some changes to the laws on employee benefit program taxation.
The good news for individuals is that now you are not required to start taking Required Minimum Distributions from tax-qualified retirement programs (401k's, 403b's, IRA's, etc.) until April 1st of the year after you turn 72. Previously you had to start taking distributions the year after you turned 70 1/2.
So, if you do not need to use the money in your retirement account, you have an extra year and a half to before you have to start withdrawing it and paying taxes on the distributions.
This new rule applies to you if you reached the age of 70 1/2 after December 31, 2019.
[If you do have to take a required minimum distribution from your retirement account, check out our article on "A Tax Smart Way to Take Money out of your Retirement Account".]
Another benefit for individuals is that starting in tax year 2020 you can contribute to an IRA regardless of how old you are. Previously you could not contribute after age 70 1/2.
Our RINA Wealth Management team is currently helping several clients navigate these changes.
If you would like to discuss how the changes affect you, please contact Roshan Weeramantry at 510-873-0950 or by email.