Understanding The SECURE Act: When Did You Turn 70.5?

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Are you right on the edge of taking RMDs and wondering what the recent changes due to the SECURE Act mean for you? We’ll explore the difference a few months could mean when it comes to taking RMDs under the new SECURE Act.

Click on the timestamps below to jump to specific topics. 

Confidence Corner

The SECURE Act just passed in December. While we’ve talked through some of the proposed changes in the past, there’s still a bit of confusion around the RMD age as it goes into effect.

To make things a bit more fun, let’s play a bit of “this or that?” Are you more like Billy Joel or more like Bruce Springsteen? Both musicians were born in 1949 but in different times of the year. Billy Joel turned 70 and a half in 2019, so he will fall under the old rules whereas Bruce won’t have to take his RMDs until 2022. You’ll want to ask your advisor whether you fall under the old rules or the new rules, which will make a big difference when it comes to your RMDs and taxes.

If you have already started taking RMDs, you have to continue taking them and get grandfathered into the old rules. But if you turned 70 and a half near the end of last year, you may be able to delay them until you are 72 years old. Regardless, check with your financial advisor because you don’t want to have to pay a big penalty if you’re wrong.

Listen to the full episode to hear more about RMDs or click on the timestamps below to hear a specific segment.

[1:35] – The SECURE Act passed but is still a bit confusing when it comes to RMDs.

[2:21] – Let’s play: This or That?

[3:19] – What’s the difference between being born at the beginning of the year and the second half of 1949 for RMDs?

[7:07] – Fun fact: IRA and 401(k) rules were started in 1974, the same time Billy Joel and Bruce Springsteen started their careers.

[8:43] – Make sure you check with your advisor to avoid the penalty of being wrong on your RMD age.

[11:46] – Upcoming class: Retirement Planning Today will be held on February 4th and 11th.

 

 

A Point Of Wisdom:

 

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