Wednesday, September 12, 2018
Mandatory amounts people must withdraw from certain retirement accounts to not be penalized by the IRS, or required minimum distributions (RMDs), may be about to change. President Trump has directed the Treasury and Labor departments to consider the implications of delaying the age of RMDs.
Financial experts around the country believe that they already know the implications, which would be a great benefit - but only to wealthy clients. As for low- and middle-income retirees, it makes no to little difference, and it may even be a detriment to the government. "Since the point of RMDs are to generate taxable income from these distributions, it probably won’t help the federal deficit if they push the age back,” said Mark Beaver, a financial adviser at Keeler and Nadler in Dublin, Ohio.
Required minimum distributions most negatively affect retirees with large retirement account balances, because these withdrawals are taxed as ordinary income and push account holders into higher tax brackets upon distribution.
See Alessandra Malito, Rich People Win (Again) if the New RMD Proposals Become a Reality, Market Watch, September 7, 2018.
Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.) for bringing this article to my attention.