Clients who will be turning 70 ½ this year are being advised to PAUSE with regards to taking their Required Minimum Distribution from their IRA for 2019.
Clients of this age AND who have an IRA or a 401(k) plan, under current tax law, are required to begin taking their Required Minimum Distribution (“RMD”).
However, there are proposals in both the House and the Senate to increase the age when they are required to take their RMD. The bill in the House, called the SECURE Act, would increase the RMD age to 72. The Senate has passed their legislation called RESA. This would increase the RMD age to 75.
While both of these are merely proposals and not final legislation, if a bill is passed, it would appear the RMD age would increase to at least age 72. If legislation is passed, and individuals can afford NOT to take funds out of their IRA, they would likely be better served to wait until age 72 and defer the tax.
Borgida & Company, P.C. will keep you apprised of this pending legislation as it develops. In the meantime, if you have any questions, please call our office (860) 646-2465.