New rules from the Internal Revenue Service (IRS) change the way you receive required distributions from inherited IRAs (individual retirement accounts). The ruling changes the age at which account holders must begin taking required minimum distributions (RMDs), raising it from 72 to 73, so people born in 1951 must receive their first required minimum distribution by April 1, 2025.
Joel Dickson, global head of advisory methodology at Vanguard, joins Wealth! to break down the new IRA rules and explain what American retirees need to consider going forward.
Dickson summarizes the new rule as follows: “Basically, most non-spouse beneficiaries will have to draw down their IRA assets more quickly than before.”
“There’s a silver lining to the new IRS rules, too, because they may require more acceleration of that money. So if you can avoid taking large distributions that put you in a higher tax bracket in the future, it may make sense from a total tax payment and even total wealth perspective to take distributions from an inherited IRA, perhaps even faster than the IRS (regulatory) rules suggest,” Dickson says.
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This article was written by Nicolas Jacobino
