Over the past few years, there have been a variety of changes that affect retirement accounts and retirement plans. The following are a few reminders of changes as a result of the Secure Act (2020) that may affect your retirement savings in 2022.
The age of an IRA Required Minimum Distribution (RMD) has increased from the age of 70.5 to 72. If you were born after July 1, 1949, your RMD age is 72. One more thing to celebrate if you were born the year the first polaroid camera sold for $89 and RCA perfected a new technology to broadcast color TV.
In the event that you inherit an IRA from someone other than your spouse, or you inherit an IRA from your sugar momma that is more than 10 years older, distributions can only be stretched for up to 10 years as opposed to the lifetime of the beneficiary.
(Sorry kids and mail-order-partners, you're going to have to spend that money in a decade.)
For extremely risk-averse individuals, annuities with a pension type of lifetime payouts will be available in many 401(k) plans. Maybe some helpful news for all the Sarah Savers entering retirement.
The age limit for IRA contributions has been removed. This means you can contribute to an IRA after the age of 72 and receive a tax deduction if you have earned income.
Lastly, an item that has been around for many years but always worth mentioning is If you are over the age of 50 with earned income you are allowed a “catch up provision” that provides you the benefit of increasing your annual IRA Contribution from $6,000 each year to $7,000.
Markets are acting up. Make sure to stay on top of what we are watching. Read our most recent Market Minutes From The Boardroom for actionable insights on the market's most recent moves!
What's New in '22
What You Need to Know
As for what is new in ‘22 and has importance to Retirement Red Zone individuals, here is what you need to know:
If you are over age 50, the maximum amount you can contribute to your 401k has increased by 1k to $27,000.
Since we seem to be living longer even with Covid, the IRS has made adjustments to the calculation used for determining how much money needs to be withdrawn from an IRA each year as a Required Minimum Distribution (RMD) for those over age 72. This means if you are over the age of 72 you will need to recalculate the amount of your RMD using the new life expectancy table the IRS has issued.
In other news about your money that you may be interested in knowing:
Remember the Blue Wave and the fear of imminent tax raises we should expect? Well after a full year in office there hasn’t been one peep worth talking about when it comes to potential tax increases and in our opinion you won't hear anything in ‘22 either, at least till after the results of the midterm elections.
Biggest increase in monthly SS cola due to inflation the past year. SSI benefits increased 5.9% and medicare cost increased 14.5% on average.
The annual gift amount is now $16K per person.
Something that seems humorous but true, did you know that the IRS has added to the tax code that you are required to report stolen goods? I hope this does not include restaurant sugar packets and napkins from Chipolte or were in trouble.
Just this week equity markets have begun breaking down certain trends. Is this a time to buy or a time to run? Make sure to read our upcoming Market Minutes From The Boardroom.
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Meet Our Contributers
Colby McFadden Founder, Quiver Financial
Justin Singletary Director of Retirement Services, Quiver Financial
Patrick Morehead Director of Alternative Investments, Quiver Financial
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