Happy New Year from RIA Advisors Planning Corner! As we wind down the holiday season our focus begins to shift back toward wealth and health.
This financial industry and retirees have been trying to figure out what the passage of the SECURE ACT means to them. Weโve spent some time on this over the last couple of weeks, but we keep getting one really important question from readers over the holidays.
When do I have to take my Required Minimum Distribution aka RMD from my tax deferred retirement account?
Weโll break this down for you by date of birth.
You were born before 1949โฆ
Business as usual if you are already taking RMDโs. The SECURE ACT does not impact you. Continue to take your RMDโs as scheduled.
If you were born between January 1st and June 30, 1949โฆ
Again, business as usual. Since you turned 70 ยฝ in 2019 hopefully you have already taken your RMD. However, if you didnโt make your distribution in 2019 youโre in luck. You can still take your 2019 distribution as long as you do so prior to April 1, 2020. Remember you will still be on the hook for your 2020 RMD as well as last yearโs 2019.
You were born between July 1st and December 31st, 1949โฆ
Winner, winner chicken dinner! The SECURE ACT does affect you. Your first RMD is now 72 instead of 70 ยฝ.
You were born after 1949โฆ
Ding, ding, ding you won the SECURE ACT. Your first RMD doesnโt happen until youโre 72.
RMDโs arenโt to be taken lightly. If you neglect to make your distributions Uncle Sam will penalize you to the tune of 50% of the amount not withdrawn.
Iโm sure in the coming weeks weโll continue to discuss the implications of the SECURE ACT as we receive more questions. The bill certainly accelerates the need for funds outside of Traditional IRAโs and retirement accounts since the Stretch IRA is all but dead. For more information on the SECURE ACT go to www.realinvestmentadvice.com and type in SECURE ACT in the search bar for previously written articles.
