Tax Blog

Changes to IRAs and Retirement Plans By The SECURE Act: RMD Age

The SECURE Act has made changes to various aspects of investments and taxes. Some of the largest changes can be found with regards to IRA’s retirement plans and other retirement plans. Taxpayers should pay attention to new rules governing the age at which required minimum distributions (RMDs) must be taken.

If a taxpayer turned age 70 ½ prior to January 1, 2020, their RMDs are based on age 70 ½, not age 72. Due to changes made by the SECURE Act, if a taxpayer’s 70th birthday is July 1, 2019 or later, they do not have to take withdrawals until they reach age 72. Roth IRAs do not require withdrawals until after the death of the owner.

A taxpayer reaches age 70½ on the date that is 6 calendar months after their 70th birthday. For example: you are retired and your 70th birthday was June 30, 2018. You reached age 70½ on December 30, 2018. You must take your first RMD (for 2018) by April 1, 2019. You will take subsequent RMDs on December 31st annually thereafter, as will be discussed below. Another example: you are retired and your 70th birthday was July 1, 2019. You reach age 70½ after December 31, 2019, so you are not required to take a minimum distribution until you reach 72. You reached age 72 on July 1, 2021. You must take your first RMD (for 2021) by April 1, 2022, with subsequent RMDs on December 31st annually thereafter.

The professionals at The Center for Financial, Legal and Tax Planning are more than well-equipped to answer your questions with regards to required minimum distributions and other investment matters. Please contact us at (618) 997-3436 to setup a free consultation.

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The Center for Financial, Legal & Tax Planning, Inc.

4501 West DeYoung Street | Suite 200 | Marion, IL 62959

Phone: 618-997-3436| Fax: 618-997-8370

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