As the new year kicks in, one of the first things advisors need to tell their clients is to expect larger required minimum distributions in 2024, according to Ed Slott of Ed Slott & Co.
Why? Because stock values for the Dow Jones Industrial Average at the end of 2023 — the index’s highest year-end close in history, at 37,689.40 — pushed IRAs to their highest balances ever, Slott told ThinkAdvisor Thursday in an interview.
How to Calculate 2024 RMDs
The 2024 RMD calculation begins with the account balance on Dec. 31, 2023, Slott explained.
“That number is locked in, even if markets decline during the year,” Slott said. “Due to the record stock values at year-end, this will produce a larger 2024 IRA RMD (for those who have significant IRA funds in stocks — which are most people).”