In the last couple of years we have seen some pretty dramatic changes to Individual Retirement Accounts. First, the IRS delayed the start of Required Minimum Distributions (RMDs) until age 72; previously you had to start in the year you reached 70 1/2 years old. Second, non-spouses who inherit IRAs may no longer “stretch” the distribution over their lifetime. This feature had created the affectionate term Stretch IRA. Now, if non-spousal beneficiaries must distribute 100% of the inherited account within 10 years.
The big change for 2022 is an update to the withdrawal factor tables or RMD tables. Across the board the factor at each age has been reduced slightly. This update was made as people, as a whole, are living longer.
Finally, the phase out range for Roth IRA contribution eligibility increased to $129,000 to $144,000 for single tax-payers and $204,000 to 214,000 for those married filing jointly.
Regarding phase-out eligibility for people who are covered by an employer sponsored retirement plan for single taxpayers increased slightly to $68,000 to $78,000. For married couples filing jointly, if the spouse making the IRA contribution is covered by an employer sponsored retirement plan, the phase-out range is increased to $109,000 to $129,000. And for those who are not covered by a workplace retirement plan but is married to someone who is covered, the phase-out range is increased to $204,000 to $214,000.
The limit on annual contributions to an IRA (Traditional or Roth IRAs) remains unchanged at $6,000. The catch-up for provision for those over age 50 is still $1,000 for IRA accounts.