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Here at Strategic Partners Unlimited, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Strategic Partners Unlimited
(512) 508-8430

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FIRST TIME RMDS AND SIMPLE IRA CONTRIBUTIONS: TODAY’S SLOTT REPORT MAILBAG

By Andy Ives, CFP®, AIF®
IRA Analyst

Question:

I am going to turn 72 in December of 2021. When I take my RMD, what is the dollar amount I use to calculate my RMD? Is it the account value ending December 31, 2020, or December 31, 2021? Thank you for any clarification.

Bob

Answer:

Bob,

Since you turn 72 in December of this year, 2021 is your very first year for having to take a required minimum distribution (RMD). Your RMD will based on the value of your account as of December 31, 2020. Also, since 2021 is your first RMD, you can delay taking that first RMD until April 1, 2022. However, if you delay, you will be required to take two RMDs in 2022 – the 2021 RMD based on the December 31, 2020 balance, and the 2022 RMD based on the December 31, 2021 balance.

Question:

I know that workers over 70 ½ can now contribute to a traditional IRA. Can they contribute to a SIMPLE IRA? Thanks!

Sue

Answer:

Sue,

Yes, workers over age 70 ½ can contribute to a SIMPLE plan. Be aware that, while you can contribute to a SIMPLE plan over the age of 70 ½, if you are subject to RMDs, those dollars will also have to be withdrawn. That may create somewhat of a “revolving door” of contributions and required minimum distributions.

https://www.irahelp.com/slottreport/first-time-rmds-and-simple-ira-contributions-todays-slott-report-mailbag

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