Changes to Required Minimum Distributions (RMD’s)

A change to the SECURE (Setting Every Community Up for Retirement Enhancement) act on December 29, 2022 has altered the age at which owners of retirement accounts must start taking Required Minimum Distribution (RMD’s).

Key provisions of SECURE 2.0 with January 2023 effective dates include:

• Starting January 1, 2023, RMDs will increase to age 73. This provides individuals with an additional year to delay taking a mandatory withdrawal from a tax deferred retirement accounts (Traditional IRAs, Roth IRAs, 401(k), 403(b), etc.)
• The 50% penalty for failing to take the RMD on time has been adjusted and decreased to 25% of the RMD amount along with a reduction to 10% if the error is corrected in a timely manner.
• For account owners who turned 72 in 2022 or earlier, RMD will continued as scheduled.
• The RMD Beginning Age is scheduled to increase to age 75 in 2033.

Your Plena Wealth Advisory Team is here to help navigate these complexities with you. Our team would prepare a cross-border financial plan that informs a coordinated investment strategy specific to your cross-border status (e.g., all assets, on either side of the border, can be managed in one place by one advisor, and are managed with consideration to the unique ongoing tax exposure on both sides of the border) and ensure you are compliant with RMDs and IRS filing obligations regardless of your country of residency. We would be happy to set up a call to discuss your specific situation to ensure you are making the right decisions.

Disclaimer: This does not constitute an offer or solicitation by anyone in any jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. This is intended for Canadian residents only. Raymond James Ltd. is a Member Canadian Investor Protection Fund.