How the CARES Act has Changed RMDs for 2020
June 3, 2020
Here is what you need to know about delaying required withdrawals from a retirement account until 2021.
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Here is what you need to know about delaying required withdrawals from a retirement account until 2021.
The $2 trillion stimulus plan includes a temporary waiver of required minimum distribution rules for certain defined contribution plans and IRAs for calendar year 2020.
How much you will pay in taxes on an individual retirement account (IRA) withdrawal, depends on the type of IRA, your age and the purpose of the withdrawal. Sometimes the answer is zero—you owe no taxes. In other cases, you owe income tax on the money you withdraw and sometimes an additional penalty if you withdraw funds before age 59½. On the other hand, after a certain age, you may be required to withdraw money and pay taxes on it.
During the estate planning process, these beneficiary designations are reviewed to ensure that the beneficiaries are correct, and that the distribution of these assets conforms with the client’s intended estate plan.
Social Security provides a guaranteed source of income in retirement, but what many don’t realize is that you’re not guaranteed to keep it all.
Failing to withdraw a required minimum distribution (RMD) from your own or an inherited IRA by the deadline results in a big tax code penalty: 50%. That’s right.
A 401(k) is an employer-sponsored account that allows you to defer the taxes on your investments until retirement, which means that you can roll up more money faster.
These changes are so significant that every such plan holders should review their wishes and how their estate plans may be affected.
My parents are in their 70s and they don’t have anything planned. I’ve spoken with them about the importance of planning.
If you want to enjoy the company of other people your age, an independent living center might be a good fit for you.
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