5 Suggestions for the IRS on Secure Act RMD Regs, From Annuity and Pension Pros
The IRS kicked off a complicated series of letter-writing in February, when it released draft regulations for new rules governing the required minimum distribution. The comment period ends on Wednesday.
The agency has drafted the implementation of the RMD rule amendment provisions in the Every Community Retirement Improvement Act 2019, known as the Secure Act.
Certain provisions of the Secure Act RMD could come into effect “on the last day of the first year of the plan beginning on or after January 1, 2022”. A coalition of 12 life insurance and annuity groups united in March to ask the IRS to extend the deadline by at least one full calendar yearclaiming that the current deadline is unrealistic.
For a look at what some other commentators are saying, particularly about the proposed RMD regulations and annuities, or defined benefit pension plans that could use annuities as a funding vehicle, see the gallery above.
The RMD is, in fact, the government’s preferred retirement income arrangement.
The RMD rules are meant to set minimum levels for the amount of taxes relatively well-off taxpayers pay on assets held in 401(k) plan accounts, traditional IRAs and other tax-deferred retirement vehicles.
Once the client reaches RMD age, the client must start taking a minimum amount of money from the retirement nest egg and include the money from the nest egg in taxable income calculations. The Secure Act raised the age of the RMD from 70 1/2 to 72 years.
Ed Slott recently pointed out, in an email to ThinkAdvisor’s Melanie Waddell, that agents and advisers should pay close attention to the proposed regulations, as some provisions indicate how the IRS interprets existing law and are, technically, already effective.
(Image: Andrii Vodolazhskyi/Shutterstock)