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IRA Rules We Give Thanks For in 2022 Thumbnail

IRA Rules We Give Thanks For in 2022

It is a Thanksgiving tradition here at the Slott Report to take a moment to give thanks for the IRA rules that are helpful to retirement savers and investors.

Now we get to take a chance to look at the non-detrimental aspects of retirement planning and be thankful for them.


We know there are many times the rules governing retirement accounts can be tricky. They often seem illogical, confusing, and may be even unfair. However, there are others that work well and give us the tools we need to save for a secure retirement – and may be even get a few tax breaks along the way.

Here are a few IRA rules for which we are thankful in 2022:

Roth Conversions – Roth conversions allow IRA owner to move funds from pretax to after tax. There is a tax bill, but the potentially huge payoff down the road is tax-free distributions of growth. We are grateful for this strategy that gives retirees the peace of mind that comes with not having to worry about future tax rates or the impact of taxable IRA distributions on Medicare, Social Security and other tax deductions and credits.

Bigger Contributions Allowed in 2023 – No one likes inflation, but when it comes to retirement accounts, there is one bright spot. Inflation has led to the largest cost-of-living increases to the retirement account contribution limits in a long time. While inflation is no fun, we are thankful that next year savers can put away a little more for a secure retirement. The IRA contribution limit will increase to $6,500 for those under age 50.

Catch up contributions – Time flies. Many workers see retirement looming and they feel unprepared. Older savers close to retirement can put away a little more with a catch-up contribution. Those of us over age 50 give thanks for this break. For 2023, those age 50 or over can put away an extra $1,000 for a total of $7,500 in IRA contributions.

The Sweet Spot – Everyone likes flexibility. The sweet spot is where the IRA rules give that to us, and we are thankful. Between the ages of 59 ½ and 72, not only does the 10% early distribution penalty not apply but also there are no mandatory distributions. Required minimum distributions do not start until age 72. This is a great opportunity for IRA owners to do some IRA distribution and conversion planning on their own timeline, without worries of penalties. They can do what is best for them and not Uncle Sam. For this we are grateful.

Qualified Charitable Distributions – A QCD allows an IRA owner to move funds from their IRA to charity tax-free. A QCD is a great way to get a tax break for giving if you are charitably inclined and use the standard deduction. A QCD can also satisfy an RMD. What is not to like? We are grateful for this tax break that not only helps the IRA owner but also contributes to the greater good.

By Sarah Brenner, JD
Director of Retirement Education
Ed Slott and Company, LLC

Copyright © 2022, Ed Slott and Company, LLC Reprinted from The Slott Report, 11/23/22, with permission. https://www.irahelp.com/slottreport/ira-rules-we-give-thanks-2022, Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article. Chris Cordoba, founder of California Retirement Advisors, is a member of Ed Slott's Master Elite IRA Advisor Group.
Investment advisory services offered through Mutual Advisors, LLC DBA California Retirement Advisors, a SEC registered investment adviser. Securities offered through Mutual Securities, Inc., member FINRA/SIPC. Mutual Securities, Inc. and Mutual Advisors, LLC are affiliated companies. CA Insurance license #0B09076. This content is developed from sources believed to be providing accurate information and provided by California Retirement Advisors. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. California Retirement Advisors, nor any of its members, are tax accountants or legal attorneys and do not provide tax or legal advice. For tax or legal advice, you should consult your tax or legal professional.