Tax Talk & Changes in Required Minimum Distribution Rules
Important compliance deadlines are just around the corner for defined contribution plans. ABG Southwest advisors are also discussing recent changes to the required minimum distribution (RMD) rules which have important implications for retirees.
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Upcoming Compliance Deadlines
Changes in Required Minimum Distribution Rules
April 1st was the deadline for only those who turned 72 in 2021 and did not take a required minimum distribution last year. Participants aged 72 must begin taking distributions from their tax-deferred retirement account. However, they can delay taking an initial RMD until April 1st of the year following their 72nd birthday.
At the beginning of 2022, the IRS life expectancy tables, which are used to calculate RMDs, were updated for the first time since 2002. If a retiree turned age 72 in 2021, the new IRS tables would not apply to the RMD that was due by April 1, 2022, because that RMS relates to 2021. However, the new tables would apply to the 2022 RMD required to be taken by December 31, 2022.
As always, your trusted retirement plan advisors are standing by to answer any questions related to these recent changes, or other related matters. Please Contact Us to get connected.