Are changes coming in rmd beginning date ?

[RWG1950]

Earlier this year, I recall reading that a possible change to the RMD beginning date was being considered by congress.
I.E. moving the RMD beginning date from age 70 & 1/2 to a later age for IRA's and other such qualified plans.
Anybody know anything on the status of this proposal ?

[kathyc2]

https://www.congress.gov/bill/116th-congress/house-bill/1994/all-actions?overview=closed

[jmcdtax]

You may be thinking of QLAC Qualified Longevity Annuity Contract. A person can invest a maximum of $130,000 or 25% of an IRA/year in a QLAC and defer RMD from that part of the investment up to age 85. Any remaining amount in the IRA would be subject to RMD at age 70.5. There are pros and cons. One thing to consider can you afford to defer part of your RMD to a later age. Will you live long enough? The taxes collected by the IRS can be deferred but will eventually have to be paid.

[RWG1950]

No, my comment was concerning possible changes to the RMD beginning date & had nothing to do with QLAC's

[Burke]

Above link covers the pending bill and the last action on it. It proposed changing the RMD beginning date of 70 1/2 to age 72. But there are a host of other changes involving other things like 401k investment maximums and IRA contributions based on earnings past age 70. The post regarding QLAC's is interesting.

[kathyc2]

Interesting article on the bill: https://www.nytimes.com/2019/06/04/y...th=login-email

[JohnH]

Adding annuities to 401(k) plans is beyond stupid, but that won't prevent it from happening once enough money flows into the campaign coffers of the privileged political class. Seems self-evident that the people who have given us the current financial state of our state and Federal governments should be barred from making any financial decisions (especially with respect to individuals). but that just isn't the way things work.

[Rapid Robert]

Dozens of discussions both in this forum and others tell us that no one is penalized for not taking out their RMDs at age 70.5 for a couple of years, sometimes longer. Just write a little "oops, I have a handle on all my other financial affairs but somehow this one got away from me because I'm old" letter to the IRS and leave it at that, everyone says it always works. So why is a change to the law needed? Just let taxpayers continue to cheat on the deal they agreed to when they started making tax-deferred retirement contributions in decades past, like they already do.

Or, more appropriately, if they really want to deal rationally with older retirement ages as the life expectancy increases on average over time, then phase it in for folks who are younger now, in other words, move the RMD start date out a few years, but only for people born, say, 1960 or later. There is no economic justification of any kind, that I've seen anyone provide, for why today's 70-yr olds need another two years to begin RMDs. They don't have to spend the RMD money after all, they can still save it for future retirement, or leave it to their heirs without any accompanying tax burden.

There was another thread recently on this same topic where some of the comments boiled down simply to "it always makes sense to lower tax rates for people who are already well-off", so if Congress will at least acknowledge that that is what the bill sponsors are trying to do, at least it would be honest.