If you’re a certain age, you’ll need to withdraw money from some of your retirement accounts each year. But in 2022, the amount you must take out may be changing more than in other years – and that could affect your retirement income strategy.
Once you turn 72, you generally must start taking withdrawals, called required minimum distributions, or RMDs, from your traditional IRA and your 401(k). Now, the life expectancy tables used by the IRS are being updated to reflect longer lifespans – a move that may result in lower annual RMDs than you’d have to take otherwise.
This change could help you. For one thing, RMDs are generally taxable at your personal income tax rate, so the lower your RMDs, the lower your tax bill might be.
Also, since lower RMDs mean that less money will be taken from your IRA and 401(k), these accounts may not be depleted as quickly.
Furthermore, the lower RMDs may give you more flexibility in planning and managing your retirement income.
Changes to the RMD rules don’t happen too often. So, consider how the new, lower RMDs may work to your advantage.
This content was provided by Edward Jones for use by Daniel Pellerin, your Edward Jones financial advisor at 189 East Main Street Suite G, in Newport, (802) 334-6261.