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IRS: changes help seniors with required withdrawals

Seniors are required to withdraw a certain amount from the retirement accounts, but now they can withdraw less according to the IRS.

Paved road with the word "Retirement" on it heading into the mountains and sunset representing retirement accounts like IRAs that the IRS requires taxes on

The life expectancy has risen from 82.4 to 84.6 in the eyes of the IRS and will benefit people with required minimum distributions.

RMDs have a set requirement for seniors to withdraw a certain amount from their retirement accounts.

If they fail to, they are hit with hefty penalties.


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Anyone with a birthdate after July 1, 1949, they have to start withdrawals at age 72.

Failing to comply results in a 50% excise tax.

The withdrawals need to be done annually once you hit age 72.


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Roth IRAs are not subject to RMDs.

Your RMD is determined using the previous year’s balance divided by life expectancy.

By raising the age of life expectancy, this allows for funds to grow larger.

 

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