Will You Really Need RMDs at 70 1/2?

I’ve written about the SECURE Act here many times in recent months as it is legislation that could open up a lot of retirement saving opportunities for a wide swath of Americans. Officially titled as “The Setting Every Community Up for Retirement Enhancement Act of 2019,” this bill could allow for small businesses to band together to offer retirement savings plan benefits, increase the age for required minimum distributions (RMDs), and allow IRA and 401(k) plan holders to purchase annuities with money in the accounts. While all those a good things, this post is really going to focus on the age for taking RMDs and how pushing it back could be a good thing–or something that doesn’t matter at all. For those who want to continue working into your 70s, the thought of delaying RMDs can be quite enticing. I mean, if you’re earning income, then why would you want to touch your retirement savings? However, according to some experts, that really may not matter as most Americans probably won’t work past 70 1/2. The SECURE Act is looking to push the required age for taking RMDs back by about 18 months to age 72. On average, that would save retirees about $33,500, but that really isn’t much, especially if your retirement lasts decades. This leads to my next question, will you need your RMDs at 70 1/2? If not, what do you plan on doing with the money? Will you invest it? Give to charity? These are things you should be thinking about as you move towards retirement, especially if you plan on retiring past the required RMD age. If you need ideas as to what to do with your RMDs, you should speak with a certified financial planner.