Retirees could take smaller mandatory withdrawals from their tax-advantaged accounts under a new Treasury Department proposal designed to adjust for rising life expectancy, the Wall Street Journal reported. If finalized, the rules would take effect in 2021, reducing tax collections and letting more money accumulate in tax-preferred accounts. The change amounts to a tax cut for retirees who don’t need to tap their savings for living expenses. According to an example in the regulations, a 70-year-old with a $250,000 retirement account would be required to withdraw $8,591 instead of $9,124. A 75-year-old with a $500,000 balance could reduce that year’s withdrawals — and thus taxable income — by about $1,500, according to Ed Slott, an accountant in Rockville Centre, N.Y., who specializes in retirement accounts.
