By Sarah Brenner, JD
Director of Retirement Education
Pop the champagne! It is almost time to turn the page on the calendar to a new year. What will 2022 mean for your retirement accounts? All signs point to a very busy year ahead. Here is what we may expect for retirement accounts in 2022.
1. New life expectancy tables for calculating required minimum distributions (RMDs) go into effect. In 2022, at long last, the IRS has put new life expectancy tables in place for calculating RMDs from retirement accounts. The new tables are good news for account holders because they will mean slightly smaller RMDs on account of longer life expectancies. These new tables can be used by anyone who is taking RMDs, even those who inherited an account a long time ago or those way beyond their RMD required beginning date. One exception is for those who reached 72 in 2021 and decided to delay their first RMD into 2022 (before April 1, 2022). Those individuals need to use the old tables to calculate that delayed 2021 RMD even though they can take it in 2022.
2. SECURE Act Regulations May Be Coming Soon. The SECURE Act was a mammoth piece of legislation. All signs indicate that the SECURE Act regulations will also be substantial. Word on the street is that they will be hundreds of pages long. These regulations are badly needed to fill in some of the gaps in the SECURE Act and clarify some gray areas. Particularly when it comes to trusts as retirement account beneficiaries, unanswered questions remain. The IRS has indicated that these regulations may be here sooner rather than later. Stay tuned as early 2022 may very well be when we see them.
3. Build Back Better May be Back. The Build Back Better Act (BBB) with its changes to the retirement account rules, including the end of the back door Roth IRA and new rules for Mega IRAs, did not become a reality in 2021. But do not count it out in some form in 2022. Proposals, especially those that raise revenue like the BBB retirement account related ones, have a way of resurfacing. Keep an eye on Congress because it may have an eye on your retirement account in 2022.
4. Prepare for Son of SECURE. Even though the SECURE Act transformed the retirement account landscape, there were some proposals to strengthen retirement savings which did not make the final cut. Expect those proposals to be taken up in Congress again in 2022. More “Rothification,” delayed RMDs, and new rules for qualified charitable distributions could all be on the way if the “Son of SECURE” becomes a reality.
Stay tuned to the Slott Report in 2022 for all the latest developments! We will be keeping an eye on all things retirement account related. The year ahead promises to be an exciting one.