status of Secure Act 2.0 and RMD’s for 2021

Home Fairmark Forum Retirement Savings and Benefits status of Secure Act 2.0 and RMD’s for 2021

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  • #19789
    starfish11040
    Participant

    This bill was initially written last October but its introduction to Congress was delayed until after new Congress was seated. Well we’re now three months passed that and I haven’t heard anything.
    The feature that I am interested in is the increase in the age for RMD’s from 72 to 75. I will turn 73 this year. So, not knowing when or if this bill will become law, I have started taking RMD’s. So far all are QCD’s. My question is: If I take normal withdrawals (non-QCD’s), and then it does become law, can I reverse my withdrawals? I would then take the opportunity to do a conversion to Roth.

    Also, does anyone know the current status of this bill?

    #19916
    Alan S.
    Participant

    I do not think this proposal will advance at this point, or it likely would have been included in the recent ARA legislation. The focus now is shifting to making up lost tax revenue due to Covid and excessive spending.

    In addition, lacking a major market crash, this is the type of legislation that is typically done in advance so that custodians do not have to deal with distributions and rollovers as they did last year.

    However, the new RMD tables will go into effect in 2022, and RMDs will be lowered in the rough amount of 6%.

    Finally, there are many taxpayers who would actually be hurt by concentrating RMDs into fewer years. 3 added years of potential gains with no RMDs will result in larger RMDs when they finally start, or larger IRA balances left to beneficiaries, most of whom will have only 10 years to drain the inherited IRA.

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