SENIORS can now withdraw less cash from their retirement accounts thanks to a big change from the Internal Revenue Service (IRS).
The IRS is increasing its life expectancy from 82.4 to 84.6 – which will impact those in need minimum distribution requirements (RMD).
RMD forces seniors to withdraw cash from retirement accounts, and if they don’t comply, they could be fined.
If you were born on July 1, 1949 or later, then RMD starts at age 72.
Those who do not meet their RMD, or if the withdrawal amount is insufficient, will be subject to a 50% excise tax – so it is best to avoid this.
Furthermore, withdrawals must be made every year after the year you hit 72 to avoid penalties.
RMD applies to most holdings except Roth individual retirement accounts (IRA).
Withdrawals for a Roth IRA are not required until the owner’s death.
Follow IRS, RMD is calculated based on the previous year-end balance for each of your eligible retirement accounts divided by the “lifetime factor”.
For example, if you’re 75 years old, the life expectancy factor is now 24.6 – which means your RMD would be around $8,130 if you had a balance of $200,000.
Under the previous rules, a 75-year-old with that balance would have to withdraw about $8,733 because the life factor is 22.9.
This gives seniors the opportunity to watch their funds grow larger.
You can check out full table to find your age and lifespan factor.
On the other hand, find out if you will lose by early withdrawal from your retirement account.
And this retirement mistake can your cost is more than 1.2 million.
https://www.the-sun.com/money/4498216/rmd-retirement-accounts-2022-irs/ Big IRS change to help millions of seniors with retirement accounts as required withdrawals cut