Required minimum distributions (RMDs) are a crucial aspect of retirement planning that everyone needs to understand. Here are the latest changes to the RMD rules in 2024 that could impact your savings and tax bill:
1. Required minimum distributions no longer apply to Roth 401(k)s
In 2024, RMD rules have changed for Roth 401(k)s. Previously, you had to start taking RMDs from your Roth 401(k) at a certain age, similar to traditional retirement accounts. However, this year, you can keep your Roth 401(k) without worrying about RMDs, allowing your money to grow tax-free.
2. Those who inherited IRAs since 2020 can avoid taking RMDs in 2024
Under the SECURE 2.0 Act, beneficiaries who inherited IRAs between 2020 and 2024 are not required to take RMDs this year. This change provides taxpayers with more flexibility in managing their inherited accounts and tax liabilities.
3. Those 70 1/2 and older can lower RMDs by up to $105,000 per year
Seniors aged 70 1/2 or older can benefit from qualified charitable distributions (QCDs) to lower their RMDs. With an increased limit of $105,000 for QCDs in 2024, individuals can make tax-free donations directly from their IRAs to reduce their tax bills and support charitable causes.
These new RMD rules for 2024 offer valuable opportunities for retirement planning and tax savings. Stay informed to make the most of your retirement accounts and minimize unnecessary expenses.