Timothy Sumer

The passing of the 2019 Secure Act changed the rules about when non-spouse beneficiaries must begin taking money from inherited retirement accounts. Starting in 2020, instead of stretching withdrawals over your lifetime, most investors inheriting an IRA from a parent were subject to a new "10 year rule." This meant annual required minimum distributions (RMDs) were out. Instead, beneficiaries had to take the money - in full - in 10 years. In early 2022, the IRS proposed new changes, and if enacted, some inherited IRA beneficiaries will need to take RMDs again and could face big penalties. Unless a non-spouse beneficiary qualifies for an exception¹, previous guidance stipulated that funds from an inherited 401(k), IRA, 403(b), or other qualified retirement plan (including Roth IRAs) must be taken in 10 years following the year of death. Original guidance indicated disbursements within this 10-year window were optional. Now, proposed regulations from the IRS further co...

If you “love” your 401(k) plan at work, you’ll be pleased with today’s IRS announcement about contribution limits. The amount that you can contribute to your 401(k) will be higher in 2022, increasing to $20,500 from 2021’s limit of $19,500. This new limit also applies to 403(b) plans, most 457 plans and Thrift Savings Plans. The IRS defines 403(b) plans as being for “certain employees of public schools, employees of certain Code Section 501(c)(3) tax-exempt organizations and certain ministers,” while 457 plans are deferred-compensation retirement plans available for government and non-government employers. Thrift Savings Plans are retirement and savings plans for federal employees and those in the uniformed services. Note that people who are age 50 and up can contribute a “catch-up contribution” to the retirement plans listed above in 2022 of $6,500, which has not increased from 2021. By adding the overall increase to the catch-up contribution, a 50-year-old (or older) partic...