CRC Tax Planning in Retirement

Question 1

Under the SECURE 2.0 Act, at what age must individuals born between 1951 and 1959 begin taking Required Minimum Distributions (RMDs) from traditional IRAs?

Accepted Answer

Age 73

Answer

The SECURE 2.0 Act raised the RMD starting age to 73 for individuals born between 1951 and 1959, effective January 1, 2023.

Question 2

What is the excise tax penalty for failing to take a Required Minimum Distribution on time, as updated by the SECURE 2.0 Act?

Accepted Answer

25% of the undistributed amount

Answer

SECURE 2.0 reduced the RMD penalty from 50% to 25%, and further to 10% if the missed RMD is corrected within a two-year correction window.

Question 3

Which withdrawal sequencing strategy is generally considered most tax-efficient for retirees holding taxable, tax-deferred, and Roth accounts?

Accepted Answer

Withdraw from taxable accounts first, then tax-deferred, then Roth last

Answer

The conventional sequence—taxable first, then tax-deferred, then Roth—allows tax-advantaged assets to continue compounding longest while minimizing current-year tax liability.

Question 4

For a single filer in 2023, long-term capital gains are taxed at 0% if taxable income falls below approximately which threshold?

Accepted Answer

$44,625

Answer

In 2023, the 0% long-term capital gains rate applies to single filers with taxable income up to approximately $44,625, creating a strategic harvesting opportunity for retirees in lower brackets.

Question 5

What percentage of Social Security benefits may be subject to federal income tax for a single filer whose combined income falls between $25,000 and $34,000?

Accepted Answer

50%

Answer

Up to 50% of Social Security benefits become taxable when combined income (AGI + nontaxable interest + half of SS benefits) falls between $25,000 and $34,000 for single filers.

(CRC) Certified Retirement Counselor Practice Test

(CRC) Certified Retirement Counselor Practice Test

CRC Tax Planning in Retirement