Quick Tips | Retirement RMD Payment Calculations. With Bonus HOTMA Update

Facts | Once a person with a retirement account starts to make periodic withdrawals from the account, the withdrawals are counted as income, and the asset is no longer counted. One time when withdrawals must be taken is when a person reaches a specific age. The age is 72 starting in 2023 and will go to 75 in 2033. No later than that age, the person must begin withdrawing a Required Minimum Distribution (RMD) mandated by law. This must be counted as income and the asset is not counted from the point that the annual periodic RMD is taken. 

Implication | For all households with members who own retirement accounts, an owner/agent must ask if a household is withdrawing periodic amounts to determine how to count the asset or income. After the RMD age, the asset will represent income only, but how much must be counted? Households often do not know how to calculate their income or determine the withdrawals they must make to avoid penalties. 

Resource | The American Association of Retired Persons (AARP) has designed a calculator to help retirees determine their RMD. The calculator can be found HERE.

HOTMA Bonus: Below is an infographic helping to establish how to treat a retirement account FOR THE REST OF 2023 until HOTMA takes effect on 1/1/2024. From then on, only the right-hand side will apply and accounts recognized by the IRS as retirement accounts will not be counted as assets.   

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