Tom: AND WELCOME BACK.
BRUCE PORTER JOINS US FOR THIS
WEEK'S "DOLLARS AND CENTS".
HERE WE GO, HERE'S THE
QUESTION.
I'M CONFUSED BY THE NEW SECURE
ACT RULES.
MY BIRTHDAY IS JULY 16, 1949.
WHEN MUST I START RECEIVING
REQUIRED MINIMUM DISTRIBUTIONS?
DO I NEED TO TAKE IT FOR 2020?
EXPLAIN WHAT THE SECURE -- I
HAVEN'T HEARD THIS EITHER.
IN DECEMBER, THE
LEGISLATORS PASSED A NEW LAW
CALLED SETTING EVERY COMMUNITY
UP FOR RETIREMENT AND -- ACT
THE SECURE ACT.
REALLY THERE ARE THREE THINGS
AND IT'S A VERY BROAD PIECE OF
LEGISLATION.
IT IS VERY THICK AND IT CARRIES
A LOT OF AREAS BUT THERE ARE
THREE MAIN AREAS THAT REALLY
FOCUSES ON AND THAT IS WHAT WE
WANT TO LOOK AT.
MODIFYING THE RMD RULES WAS A
BIG ONE.
EXPANDING THE RETIREMENT
PLANNING ACCESS SO PEOPLE THAT
HAVE A 401(K), 403, ALL THAT.
THEN LIFETIME INCOME BENEFITS
ON RETIREMENT PLANS.
TODAY WE ARE GOING TO FOCUS ON
THE RMD RULES.
BECAUSE WERE GETTING A LOT OF
PEOPLE CONFUSED ABOUT WHEN THEY
SHOULD START, IF THEY SHOULD
START AND WE DO NOT WANT TO
MESS IT UP BECAUSE THERE'S A
HUGE TAX PENALTY.
Joy: HUGE!
I WANT THIS GOT TO NOT FEEL
BAD BECAUSE OF ALL THE
CONFUSION.
Joy: NOBODY KNOWS!
I ALSO WANT TO SHOW HIM
HERE HE NEEDS TO CONSIDER
HIMSELF VERY LUCKY BECAUSE HE
WAS BORN AFTER JULY 1, 1949.
SO IF WE FIGURE HE TURNED 70 IN
2019, SO NORMALLY HE WOULD BE
REQUIRED TO TAKE YOUR
DISTRIBUTION AT 70 1/2 WHICH
SHOULD BE 2020, RIGHT?
ALL RIGHT, NOW BECAUSE OF HIS
BIRTH DATE, HE CAN POSTPONE, IF
HE CHOOSES, HIS RMD UNTIL AGE
72.
HE DOES NOT HAVE TO TAKE IT
THIS YEAR BECAUSE IF YOU DO THE
MATH ON THAT, THE DATE, HE
TURNED 70 1/2 JANUARY 1.
NORMALLY THE RULE IS APRIL
FOLLOWING YOUR 70 1/2 BIRTHDAY.
SO BECAUSE HE TURNED 70 1/2,
THE THING TO REMEMBER, HE
TURNED 70 1/2 IN 2020.
SO IF YOU TURN 70 1/2 IN 2020,
YOU HAVE THE OPTION TO POSTPONE
TAKING REQUIRED MINIMUM
DISTRIBUTION UNTIL YOU ARE 72
YEARS OLD.
RIGHT?
Joy: EXACTLY, WHICH IS GOOD
TO KNOW BECAUSE HE MIGHT NOT
WANT TO TAKE IT RIGHT NOW.
THAT'S RIGHT.
THE PURPOSE OF IRA OR QUALIFIED
MONEY IT TO GENERATE INCOME FOR
THE FUTURE.
SO NOW, WHEN YOU CONSIDER THAT,
HE HAS CHOICES THOUGH, HE CAN
POSTPONE TILL 72.
NOW IN 72, HE WOULD TURN 72 AND
2021.
HE WILL NOT BE 72 1/2 OR IT IS
THE APRIL FOLLOWING YOUR 72
1/2.
HE COULD POSTPONE TO 2022 BUT
IF HE DID, HE WOULD HAVE TO
TAKE THE REQUIRED DISTRIBUTION
FOR 2021.
AND THEN, LATER THAT YEAR OF
2022, HE WOULD HAVE TO TAKE
ANOTHER DISTRIBUTION BECAUSE
YOU WOULD HAVE TO TAKE AN
ANNUAL DISTRIBUTION AFTER AGE
72.
Joy: YOU HAVE TO TAKE TWO.
IN THE SAME YEAR.
SO YOU WOULDN'T NECESSARILY
WANT TO DO THAT BECAUSE OF
POTENTIAL TAX IMPLICATIONS.
BUT YOU COULD IF YOU CHOSE TO.
AND THE THING TO REMEMBER IS
THAT IF YOU GOT A QUESTION THAT
INVOLVES THESE NEW RULES, JUST
GIVE ME A CALL AND WE WILL SIT
DOWN AND WALK THROUGH IT,
SPECIFICALLY BY THE DATE IF WE
HAVE TO.
SO THAT YOU KNOW EXACTLY WHAT
YOU'RE RESPONSIBLE TO TAKE UP
IT ALSO BRINGS UP THE POINT
THAT IF YOU GOT VARIOUS IRA
ACCOUNTS, RATHER THAN TRYING TO
MANAGE THIS PEOPLE ARE
CONSOLIDATING TO SIMPLIFY.
AN VALIDATION OF YOUR IRA IS A
HUGE POINT BECAUSE IT WILL
SIMPLIFY YOUR LIFE MOVING
FORWARD.
YOUR PURPOSE IS TO GENERATE
REVENUE IN THE RETIREMENT.
Tom: LET DEAL WITH ONE THING
AT A TIME.
I WOULD THINK SO.
Joy: SPEAK TO BRUCE, YOU CAN
CALL HIM.
GLAD TO HELP!
Joy: UP NEXT WE HAVE FRIENDS
HERE --
Tom: THEY WILL GIVE US
INSIDER DETAILS ON A BIG
CAMPFIRE 5K COMING UP.