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  • Writer's pictureRobert Ryerson

New RMD Rules: Good News for Retirees, But Watch Out for the 10-Year Distribution Requirement

Required Minimum Distributions (RMDs) are often a topic shrouded in confusion, but recent changes have made them a hot topic for retirees and financial planners alike. In a recent video by New Century Planning Associates, experts Robert Ryerson, RICP, and Louis Terrero, CPA, discuss the latest updates to RMD rules and what they mean for retirees.


RMDs: A Necessary Evil in Retirement Planning

RMDs are withdrawals that the federal government requires individuals to take from their retirement accounts, so that the government can collect taxes on money that has grown tax-deferred. Previously, these distributions were required when retirees reached the age of 72. However, the government has recently extended this threshold to age 73, allowing retirees a bit more breathing room. While this extension might seem minor, it reflects significant potential savings and planning opportunities for those nearing retirement.


The End of the Stretch IRA

One of the more critical changes discussed in the video is the elimination of the "stretch IRA" option. This change forces non-spouse beneficiaries to withdraw the entirety of an inherited IRA within 10 years of the original owner's death. This adjustment can lead to significant tax implications, especially for beneficiaries who are already in higher tax brackets. The removal of the stretch IRA means that careful planning is more crucial than ever to avoid burdening beneficiaries with hefty tax bills.


The Importance of Consulting a Financial Advisor

The complexities of RMDs and the recent changes underscore the importance of consulting with a financial advisor. Different accounts have different rules; for example, RMDs from multiple IRAs can be taken from any one account, whereas each 401(k) must be handled separately. This can complicate management of withdrawals, especially as individuals age and perhaps face cognitive challenges. Financial advisors can offer guidance on consolidating accounts to simplify the management of RMDs.


Strategies to Manage RMDs and Tax Implications

Ryerson and Terrero highlight several strategies to manage or even reduce RMDs, including the use of Qualified Longevity Annuity Contracts (QLACs). A QLAC can defer up to $200,000 of an IRA from RMDs, potentially reducing the taxable income during retirement. Furthermore, the conversation touches on the importance of Roth conversions and other tax diversification strategies to minimize the tax impacts of RMDs.


Planning for the Future

Effective management of RMDs not only involves understanding the current laws but also anticipating future changes in tax legislation and personal circumstances. As people live longer, the planning window extends, making it crucial to develop a robust strategy that considers long-term tax implications and estate planning.



The recent changes to the RMD rules offer both challenges and opportunities for retirees. With the increase in the RMD age to 73 and the elimination of the stretch IRA, retirees must approach their retirement planning with a well-thought-out strategy. Consulting with professionals like those at New Century Planning Associates can provide clarity and guidance, helping to navigate these changes efficiently and effectively.

As retirement approaches, understanding these rules becomes imperative to ensure financial stability and minimize tax liabilities. It's more important than ever to stay informed and proactive in managing retirement savings.

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