Brandy Auterson:
It’s now time for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. Welcome back David.
David Nelson:
Good morning Brandy.
Brandy Auterson:
So the IRS has made a number of changes to their rules recently. Could you share what you find most interesting about that?
David Nelson:
Well, every year we get updates as far as from the IRS. Typically it revolves around tax brackets, Medicare premiums, contribution limits. This year, it’s kind of an unusual year. It hasn’t happened since 2003 that we actually got an additional one and it has to do with life expectancy. So it’s an important variable when we talk about retirement planning.
Brandy Auterson:
So who’s going to notice these changes the most.
David Nelson:
Well, I think most people that are out there. The chart that I brought along will illustrate as far as just the differences between what’s taking place with the old RMD rules. And RMD stands for required minimum distribution. So this is money that you have to take out of your retirement plans. And so what took place, because life expectancy tables, actually people are living longer today than they did say 20 years ago, the tables are illustrating that people can take their money out over a longer period of time. They don’t have to take out quite as much. So for those individuals that are already taking money, as far as from their plan, from their IRA, their 401k, those type of investments, they’re at the age of 72 or above, they probably aren’t going to see that big a difference as far as from previous rules versus the new rules.
David Nelson:
However, there’s some really nice planning opportunities that exist for people that are close to retirement that are looking at RMDs with the old rules versus the new rules. There’s a lot of good planning opportunities. We talk about a lot as far as Roth conversions and things of that nature. You should work with your advisor and look at this as far as as a really nice opportunity to take advantage of as far as for your long-term financial wellbeing,
Brandy Auterson:
David, some great information there. Thanks for joining us.