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Key Points
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States That Don't Tax Income
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming
States That Don't Tax Retirement Distributions
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Taken together, these adjustments can help with retirement planning and provide a boost to your savings. Here are the details.
IRS suspends RMDS for beneficiaries again in 2024 from inherited IRAs helping fix the Secure Act 2.0 problems created
Notice 2024-35 does not affect lifetime RMDs. The RMD relief is only for IRA beneficiaries.
EDBs also don’t qualify for this RMD relief. Since they’re not subject to the 10-year rule, their 2024 RMDs must still be taken.
FIVE CLASSES OF ELIGIBLE DESIGNATED BENEFICIARIES
- Surviving spouses.
- Minor children of the account owner, until age 21 — but not grandchildren.
- Disabled individuals — under the strict IRS rules.
- Chronically ill individuals.
- Individuals older than, or not more than 10 years younger than, the IRA owner.
The IRS reprieve also does not apply to RMDs for beneficiaries who inherited before 2020. Those beneficiaries are subject to the pre-SECURE Act rules, which allow any designated beneficiary to do the stretch.
The relief only applies to those beneficiaries who inherit after 2019 and who were originally subject to annual RMDs within the 10-year period. The new IRS relief, combined with the prior relief, means these beneficiaries will have no annual RMDs until at least 2025.
Retirement RMD rules
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Another way to reduce RMDs is by buying a deferred income annuity. You can invest up to 25% of your IRA or 401(k) account (or $135,000, whichever is less) in a type of deferred income annuity known as a qualified longevity annuity contract (QLAC). When you reach a specified age, which can be as late as 85, the insurance company turns your deposit into payments that are guaranteed to last the rest of your life
The portion of savings used for the annuity is excluded from the calculation to determine your RMDs. For example, if you have $500,000 in an IRA and transfer $100,000 into a QLAC, your RMD is based only on the remaining $400,000. This doesn’t eliminate your tax bill—it just defers it. The taxable portion of the money you invested will be taxed when you start receiving income from the annuity.
QLACs offer other advantages to retirees who want guaranteed income later in life. Because you’re deferring the income stream, payouts are much higher for deferred income annuities than they are for immediate annuities, which start payouts right away. For example, a 65-year-old man who invests $100,000 in an immediate annuity will receive a payout of $493 a month, according to www.immediateannuities.com. That same amount invested in a deferred-income annuity that begins payments at age 80 would pay $1,663 a month.
define options for accumulation period, investment guaranteed minimum returns, principal return to beneficiaries etc
Medicare Premium Fees for Part B for 2024
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