Affordable housing managers know that regular distributions from retirement accounts are considered income, and when the distributions begin, the accounts are no longer considered assets. For this reason, knowing when a person is required to begin taking minimum distributions is an important piece of knowledge for managers.
The Consolidated Appropriations Act of 2023, which was passed by Congress on December 23, 2022, and was signed by President Biden, includes a change in age for Required Minimum Distributions (RMDs) from 401(k) plans, 403(b) plans, governmental 457(b) plans, and IRAs.
Here are the new age requirements:
- The new law increases the RMD age from 72 to 73 beginning January 1, 2023.
- If a person will turn 72 in 2023, they are not required to take their first RMD until 2024.
- If a person turned 72 in 2022 and deferred their first RMD, they will still be required to take that RMD by April 1, 2023.
- The RMD age will change again to 75 in 2033.
Affordable housing managers should be aware of these changes when determining the income of applicants or residents who fall into the age categories noted above.