Hi, I’m Lee Carroll. Sr. Financial Advisor with Discovery Wealth Management Group of Wells Fargo Advisors

I have some great news for your retirement plan. Starting in 2023, the age when you must start taking required minimum distributions (RMDs) from your tax-deferred retirement accounts has been raised to 73 years old for individuals who turn 72 in 2023 and beyond, and is scheduled to increase to age 75 in 2033. If you turned age 72 in 2022 or earlier, you must continue taking your RMDs as scheduled. In this video, I’ll be sharing how you can navigate the new RMD rules to help you make the most of your retirement plan.

An RMD is the minimum amount you must withdraw from your tax-deferred retirement accounts, such as 401(k)s and traditional Individual Retirement Accounts (IRA’s), after reaching age 73. The amount varies each year and is determined by the value of your account and current life expectancy.

Failure to take your required minimum distribution results in an excise tax on those funds. Beginning in 2023 the excise tax for every dollar of your RMD under-distributed has been reduced from 50% to 25%, but it’s still a cost you’ll want to avoid. This excise tax may be reduced to 10%, if you correct the shortfall during a two-year correction window.

Our team can help you navigate these new RMD rules and avoid unnecessary penalties.

The new RMD policy is in response to the increase in average life expectancy in the U.S. This change may allow your savings to experience growth potential longer before withdrawals are required, giving you more opportunity to take advantage of compounding returns. Remember, your financial advisor is there to guide you through this new rule and help you plan for your retirement. Reach out to us today to discuss your retirement plan and how we can help you achieve your goals.

Discovery Wealth Management Group of Wells Fargo Advisors

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