Although the IRS requires us to withdraw a certain amount each year from our retirement accounts in order to satisfy the Required Minimum Distribution requirements. However, if you don’t need the money, you can transfer money directly to a non-profit via a qualified charitable distribution. This can be done for a total of up to $100K per year and meet the IRS guideline. You can split your contributions between as many charities as you want under IRS rules, although some banks do place a limit on this. Talk to your bank and a local accounting firm like Hayashi & Wayland.
With the COVID-19 pandemic forcing a number of Americans to be laid off, many people are taking a close look at 72(t) plans, which allows you to withdraw money without the usual 10% penalty, even if you are below the age of 59.5 years old. Dubbed 72(t) plans, they give you a series of equal payments taken at least annually. The duration of the plan must be at least five years or until the person reaches 59.5 years, whichever is longer. Talk to your tax planner, Monterey County Bank or one of our other local banks about this option. Another possibility which was made as part of the Cares Act is an exemption to coronavirus-related distributions as another exception. If you are interested in this option, act quickly as it’s only available until year end.
A bill from Rep. Richard Neal (D, Mass.) and Rep. Kevin Brady (R. TX) would boost the age for required minimum distributions (RMDs) from IRAs and 401 (k) accounts to 75, from 72. It applies to those born after June 30, 1949. It would also waive RMDs entirely who have a cume total of less than $100K.