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How will the SECURE act affect those planning for retirement and those currently in retirement?

One of the most significant ways this new tax law will affect retirement-planning is the required minimum distribution age. Before this new law, you had to begin taxable withdrawals (Requirement Minimum DIstributions, aka RMD’s) from 401k’s, IRAs, or any other pre-tax retirement account when you turn 70 1/2. That has extended to age 72.

What does that mean for planning? The way I like to look at it is that when you achieve your RMD age, you are giving up control of your ability to control your taxes. Think about that; who has the power at that point when you need to begin taxable withdrawals at RMD age? The answer is that the control lies in the laws of the Internal Revenue Service. So much of the time, you experience a tax torpedo at RMD age, usually at a time of life when you also have fewer and fewer tax deductions.

If you can prevent that text torpedo by slowly transitioning dollars out of your retirement accounts before RMD age, you can reduce the impact of those eventual taxable withdrawals.

Changing the RMD age from 70 1/2 to 72 allows even more time to do just that. If you would like a review of your strategy to possibly lower income taxes for the rest of your life, please

How does the new age 72 rule affect me, though if I’m currently between 70 and 72? I’ll answer that in next week’s post.