{"id":539562,"date":"2023-01-16T16:42:51","date_gmt":"2023-01-16T13:42:51","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/new-retirement-withdrawal-rule-could-backfire-in-costly-way-video\/"},"modified":"2023-01-16T16:42:51","modified_gmt":"2023-01-16T13:42:51","slug":"new-retirement-withdrawal-rule-could-backfire-in-costly-way-video","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/new-retirement-withdrawal-rule-could-backfire-in-costly-way-video\/","title":{"rendered":"#New retirement withdrawal rule could backfire in costly way [Video]"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a40748e3c421\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a40748e3c421\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/new-retirement-withdrawal-rule-could-backfire-in-costly-way-video\/#New_retirement_withdrawal_rule_could_backfire_in_costly_way_Video\" >New retirement withdrawal rule could backfire in costly way [Video]<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/new-retirement-withdrawal-rule-could-backfire-in-costly-way-video\/#RMD_rules\" >RMD rules<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/new-retirement-withdrawal-rule-could-backfire-in-costly-way-video\/#Tax_implications\" >Tax implications<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/new-retirement-withdrawal-rule-could-backfire-in-costly-way-video\/#The_potential_impact_on_Medicare_premiums\" >The potential impact on Medicare premiums<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/new-retirement-withdrawal-rule-could-backfire-in-costly-way-video\/#Heirs_may_also_feel_the_sting\" >Heirs may also feel the sting<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"New_retirement_withdrawal_rule_could_backfire_in_costly_way_Video\"><\/span>New retirement withdrawal rule could backfire in costly way [Video]<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div>A new law increasing the age you must withdraw from your retirement accounts may come with some unexpected and expensive consequences.<\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/finance.yahoo.com\/news\/here-are-the-biggest-retirement-changes-coming-in-2023-200646057.html\" data-ylk=\"slk:Retirement legislation;outcm:mb_qualified_link;_E:mb_qualified_link;ct:story;\" class=\"link rapid-noclick-resp yahoo-link\">Retirement legislation<\/a> President Biden inked in December pushes the age that retirees must start taking required minimum distributions, or RMDs, from IRAs, 401(k)s, and 403(b) plans, to 73 this year, up from 72. That will bump up higher to age 75 in 2033. The delay allows investments to grow tax-free even longer and offers a window to sock more tax-deferred dollars away.<\/p>\n<p>But postponing your RMD may ultimately leave you with larger required annual withdrawals later in life, pushing your income into a higher tax bracket that may affect what you pay in taxes for <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ssa.gov\/benefits\/retirement\/planner\/taxes.html\" data-ylk=\"slk:Social Security\" class=\"link rapid-noclick-resp\">Social Security<\/a> or for your Medicare premiums. It could also become a tax headache for heirs.<\/p>\n<p>\u201cThe more you push back on the RMD age, the shorter that window to get all of that money out becomes,\u201d Ed Slott, a <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.irahelp.com\/\" data-ylk=\"slk:certified public accountant\" class=\"link rapid-noclick-resp\">certified public accountant<\/a> in New York and an expert on IRAs, told Yahoo Finance. \u201cAnd as you stuff more income into a shorter time period, overall you and your beneficiaries are going to end up paying more in taxes.\u201d<\/p>\n<figure class=\"caas-figure\">\n<div class=\"caas-figure-with-pb\" style=\"max-height: 828px\">\n<div>\n<div class=\"caas-img-container caas-img-loader\" style=\"padding-bottom:67%;\"><img decoding=\"async\" class=\"caas-img caas-lazy has-preview\" alt=\"Bad news in the mail\" src=\"https:\/\/s.yimg.com\/ny\/api\/res\/1.2\/eYZpkb5SNmgMIznqt5rc2w--\/YXBwaWQ9aGlnaGxhbmRlcjt3PTEyNDI7aD04Mjg-\/https:\/\/media.zenfs.com\/en\/aol_yahoo_finance_433\/2b6cf238bfd89ad749893643a0f0fd70\"><noscript><img decoding=\"async\" alt=\"Bad news in the mail\" src=\"https:\/\/s.yimg.com\/ny\/api\/res\/1.2\/eYZpkb5SNmgMIznqt5rc2w--\/YXBwaWQ9aGlnaGxhbmRlcjt3PTEyNDI7aD04Mjg-\/https:\/\/media.zenfs.com\/en\/aol_yahoo_finance_433\/2b6cf238bfd89ad749893643a0f0fd70\" class=\"caas-img\"><\/noscript><\/div>\n<\/div>\n<\/div><figcaption class=\"caption-collapse\">(Photo: Getty Creative)<\/figcaption><\/p>\n<\/figure>\n<h2><span class=\"ez-toc-section\" id=\"RMD_rules\"><\/span><strong>RMD rules<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You can&#8217;t keep funds in a retirement plan or a traditional IRA (including SEP and SIMPLE IRAs) indefinitely. Eventually, they must be cashed out and taxed as ordinary income.<\/p>\n<p>The new rule requires that once you hit 73, you have no choice but to start pulling money out with an RMD, which is calculated by dividing your tax-deferred retirement account balance as of Dec. 31 of the preceding year by a life expectancy factor that corresponds with your age in the IRS <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.irs.gov\/retirement-plans\/plan-participant-employee\/retirement-topics-required-minimum-distributions-rmds\" data-ylk=\"slk:Uniform Lifetime Table.\" class=\"link rapid-noclick-resp\">Uniform Lifetime Table.<\/a> As your life expectancy declines, the percentage of your assets that must be withdrawn ramps up.<\/p>\n<p>Under the new law, account holders who fail to take an RMD face a 25% penalty on the amount that is not distributed, down from 50%. And if you fix it fast, the penalty is lowered to 10%.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tax_implications\"><\/span><strong>Tax implications<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you have other taxable income in addition to your <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">Social<\/a> Security benefits, such as your RMD, that can impact how much your benefit might be taxed.<\/p>\n<p>If you file a federal tax return as an individual and your combined income \u2014 your adjusted gross income, plus nontaxable interest you have earned on investments, plus one-half of your <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ssa.gov\/benefits\/retirement\/planner\/taxes.html\" data-ylk=\"slk:Social Security benefits\" class=\"link rapid-noclick-resp\">Social Security benefits<\/a> \u2014 is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. If you earn more than $34,000, up to 85% of your benefits may be taxable.<\/p>\n<p>For those of you who file a joint return and have a combined income between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits. If your joint income is more than $44,000, up to 85% of your benefits may be taxable.<\/p>\n<p>Moreover, if you delay taking funds out, your RMD based on your dwindling life expectancy will be larger, and if tax rates should increase, you\u2019ll ultimately pay a bigger tax bill.<\/p>\n<figure class=\"caas-figure\">\n<div class=\"caas-figure-with-pb\" style=\"max-height: 826px\">\n<div>\n<div class=\"caas-img-container caas-img-loader\" style=\"padding-bottom:67%;\"><img decoding=\"async\" class=\"caas-img caas-lazy has-preview\" alt=\"\" src=\"https:\/\/s.yimg.com\/ny\/api\/res\/1.2\/KMYz4iG4sdnksdZT.3zmtg--\/YXBwaWQ9aGlnaGxhbmRlcjt3PTEyNDI7aD04MjY-\/https:\/\/media.zenfs.com\/en\/aol_yahoo_finance_433\/b6f1d30e77c6b12ab1c1a42174d89b17\"><noscript><img decoding=\"async\" alt=\"\" src=\"https:\/\/s.yimg.com\/ny\/api\/res\/1.2\/KMYz4iG4sdnksdZT.3zmtg--\/YXBwaWQ9aGlnaGxhbmRlcjt3PTEyNDI7aD04MjY-\/https:\/\/media.zenfs.com\/en\/aol_yahoo_finance_433\/b6f1d30e77c6b12ab1c1a42174d89b17\" class=\"caas-img\"><\/noscript><\/div>\n<\/div>\n<\/div>\n<\/figure>\n<p>\u201cThe tradeoff is that there could potentially be higher RMDs later and guessing what future income tax rates will be is quite a large gamble. If they are higher in the future, they would be worse off than taking them earlier,\u201d said Eileen O\u2019Connor, a certified financial planner and co-founder of <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/hemingtonwm.com\/\" data-ylk=\"slk:Hemington Wealth Management\" class=\"link rapid-noclick-resp\">Hemington Wealth Management<\/a>, told Yahoo Finance.<\/p>\n<p>Slott had a similar take.<\/p>\n<p>\u201cPeople who don&#8217;t need the money think they&#8217;re saving something by delaying the RMD,\u201d Slott said. \u201cBut over the long haul, they may end up paying more in tax by waiting till 73 and only taking minimum distributions.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_potential_impact_on_Medicare_premiums\"><\/span><strong>The potential impact on Medicare premiums<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Delaying your RMD can also have repercussions on your Medicare premiums. <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ssa.gov\/benefits\/medicare\/medicare-premiums.html#anchor5\" data-ylk=\"slk:Premiums\" class=\"link rapid-noclick-resp\">Premiums<\/a> are based on your modified adjusted gross income, or MAGI. That&#8217;s your total adjusted gross income plus tax-exempt interest.<\/p>\n<p>Simply put, if you have higher income, you might wind up paying an additional premium amount for Medicare Part B and Medicare pre<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">script<\/a>ion drug coverage. The standard rates bump up for individuals with a MAGI above $97,000 and for married couples with a MAGI of $194,000 or more.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Heirs_may_also_feel_the_sting\"><\/span><strong>Heirs may also feel the sting<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>\u201cThe delay of the RMD can create a more difficult planning environment if heirs are involved since they need to empty inherited IRA distributions within 10 years,\u201d O\u2019Connor said.<\/p>\n<p>The reality is that the more money you leave socked away in a retirement account for your heirs to inherit, the bigger the tax bite it may be for them. It\u2019s likely they will inherit when they are probably in the highest tax bracket of their life during their peak earning years. As a result, they will end up paying more in taxes.<\/p>\n<p>\u201cAnd since the <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/khn.org\/morning-breakout\/average-american-life-span-falls-to-shortest-mark-in-decades\/\" data-ylk=\"slk:life expectancy\" class=\"link rapid-noclick-resp\">life expectancy<\/a> is now 76.4, they could be leaving a lot of IRA assets to heirs,\u201d O\u2019Connor said.<\/p>\n<p><em>Kerry is a Senior Reporter and Columnist at Yahoo Finance. Follow her on Twitter <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/KerryHannon\" data-ylk=\"slk:@kerryhannon\" class=\"link rapid-noclick-resp\"><em>@kerryhannon<\/em><\/a><em>.<\/em><\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/finance.yahoo.com\/topic\/economic-news\" data-ylk=\"slk:Click here for the latest economic news and economic indicators to help you in your investing decisions\" class=\"link rapid-noclick-resp\"><strong>Click here for the latest economic news and economic indicators to help you in your investing decisions<\/strong><\/a><\/p>\n<p><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/finance.yahoo.com\/news\/\" data-ylk=\"slk:Read the latest financial and business news from Yahoo Finance\" class=\"link rapid-noclick-resp\"><strong>Read the latest financial and business news from Yahoo Finance<\/strong><\/a><\/p>\n<p><em>Download the Yahoo Finance app for <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/itunes.apple.com\/ca\/app\/yahoo-finance\/id328412701?mt=8\" data-ylk=\"slk:Apple\" class=\"link rapid-noclick-resp\"><em>Apple<\/em><\/a><em> or <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/play.google.com\/store\/apps\/details?id=com.yahoo.mobile.client.android.finance&amp;hl=en\" data-ylk=\"slk:Android\" class=\"link rapid-noclick-resp\"><em>Android<\/em><\/a><\/p>\n<p><em>Follow Yahoo Finance on <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/YahooFinance\" data-ylk=\"slk:Twitter\" class=\"link rapid-noclick-resp\"><em>Twitter<\/em><\/a><em>, <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.facebook.com\/yahoofinance\/\" data-ylk=\"slk:Facebook\" class=\"link rapid-noclick-resp\"><em>Facebook<\/em><\/a><em>, <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.instagram.com\/yahoofinance\/?hl=en\" data-ylk=\"slk:Instagram\" class=\"link rapid-noclick-resp\"><em>Instagram<\/em><\/a><em>, <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/flipboard.com\/topic\/yahoofinance\" data-ylk=\"slk:Flipboard\" class=\"link rapid-noclick-resp\"><em>Flipboard<\/em><\/a><em>, <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.linkedin.com\/company\/yahoo-finance\" data-ylk=\"slk:LinkedIn\" class=\"link rapid-noclick-resp\"><em>LinkedIn<\/em><\/a><em>, and<\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"http:\/\/youtube.com\/c\/yahoofinance?sub_confirmation=1\" data-ylk=\"slk:YouTube\" class=\"link rapid-noclick-resp\"><em> YouTube<\/em><\/a><em>.<\/em><\/p>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><script async defer src=\"https:\/\/platform.instagram.com\/en_US\/embeds.js\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/news\/\" target=\"_blank\" rel=\"noopener\">News category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/www.aol.com\/finance\/retirement-withdrawal-rule-could-backfire-134251020.html\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>New retirement withdrawal rule could backfire in costly way [Video] A new law increasing the age you must withdraw from your retirement accounts may come with some unexpected and expensive consequences. Retirement legislation President Biden inked in December pushes the age that retirees must start taking required minimum distributions, or RMDs, from IRAs, 401(k)s, and&#8230;<\/p>\n","protected":false},"author":1,"featured_media":539563,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/s.yimg.com\/ny\/api\/res\/1.2\/rzgWHPB89_2T8IimcohKRg--\/YXBwaWQ9aGlnaGxhbmRlcjt3PTEyMDA7aD04MDA-\/https:\/\/media.zenfs.com\/en\/aol_yahoo_finance_433\/2b6cf238bfd89ad749893643a0f0fd70","fifu_image_alt":"","footnotes":""},"categories":[70897],"tags":[],"class_list":["post-539562","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/539562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=539562"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/539562\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/539563"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=539562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=539562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=539562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}