RMD after Secure Act 2.0

Submitted by Mark Mannarelli on Thu, 2022-12-22 23:26

Client turned 72 in September of 2022. Under current law she would be required to take her first RMD based on 12/21/21 ending balance. Secure Act 2.0 moves the RMD eligible age to 73 effective 01/01/23. Does she still have to take an RMD this year (or alternatively, up to April 1, 2023?) Can she just skip the RMD based on 12/21/21 and be responsible for the 12/21/22 balance only? Trying to avoid 50% penalty for non-withdrawal of RMD.



Submitted by David Mertz on Thu, 2022-12-22 23:50

Because the client reached age 72 before January 1, 2023, SECURE 2.0 does not apply with regard to determining the client’s RBD.  RMDs are required for 2022 and beyond.

Submitted by Mark Mannarelli on Fri, 2022-12-23 01:47

Thanks. Assuming retroactivity would have been a costly mistake.

Submitted by Alan - IRA critic on Thu, 2022-12-22 23:59

Agree. Since she has till 4/1/23 there is plenty of time to avoid the penalty, but if the 2022 RMD is deferred to 2023 she will have two taxable RMDs in 2023, which is usually not beneficial.

Submitted by Mark Mannarelli on Fri, 2022-12-23 01:53

Agree. Two RMDs in 2023 would be a tax burden and would increase the cost of her Medicare Part B. I will recommend she take the first RMD before 12/31/22 and the second RMD by 12/31/23.

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