More Q&A About 2024 Events and Trends

 As I noted in last week’s post, I recently presented a 90-minute 2024 Personal Finance Year in Review webinar for OneOp, and, after the webinar, answered follow-up questions from webinar participants. Below are some additional questions that were asked and my responses: 

What was the purpose of the 10 year requirement where non-spouse beneficiaries must take RMDs annually during  a 10-year payout period?

Congress and the IRS know that many owners of tax-deferred retirement accounts (e.g., traditional IRAs, 401(k)s, 403(b)s, TSP), especially “super-savers” with $1 million + balances, will die and leave money in their plans. Prior to passage of the first SECURE Act in 2019, non-spouse beneficiaries could stretch required minimum distribution (RMD) withdrawals over their own life expectancy (i.e., the so-called “stretch IRA”). Now they have 10 years to withdraw inherited funds. 

The part of the 10-Year Rule that was finalized in 2024 applies to RMD withdrawals from tax-deferred accounts by non-spouse beneficiaries (e.g., adult children). Non-spouse beneficiaries must now take RMDs annually during the 10-year payout period following the account owner’s death if the account owner died on or before his or her required beginning date (RBD), which is April 1 of the year following the year that the account owner turned 70½, 72, or 73 (depending on birth year).

What is the purpose of this requirement? Very simply, income for the federal government. With the 10-Year Rule, the U.S. Treasury gets non-spouse beneficiaries’ money faster. Instead of having to wait for a life expectancy of, say, 40 to 80 years (e.g., young grandchild), they get it within a decade.

A 2024 financial term was “spaving” (spending to save money). How does “spaving” work? 

Some common examples of “spaving,” where shoppers must spend money to save money and often overspend by buying more items than they need, include the following:

• BOGOs: buy one item, get one free

• Buy one full price item, save 25% or 50% on the second item

• Reaching a certain spending threshold (e.g., $50) to qualify for free shipping

• Buying items in bulk to get a significant amount of savings

• Tiered loyalty programs where shoppers get better rewards when they spend more money

Re: the National Association of Realtors (NAR) settlement. Does that mean that commissions will remain standard unless a buyer negotiates it? How do home buyers find an agent?

The NAR settlement that went into effect on August 17, 2024 eliminated the standard 6% commission and sellers are no longer required to automatically pay a commission to the buyer’s agent as part of a listing agreement. As a result, sellers may avoid having to pay for a buyer’s agent and keep more profit from the sale of their home for themselves. Homebuyers could still ask for concessions from sellers, however, and sellers may agree if they need to move quickly or the housing market is slow. Buyers now have more control over the agent that they work with and their compensation. Home buying and selling has ALWAYS required negotiation and now even more so. To find a reliable realtor, buyers and sellers can ask for personal referrals from friends and family or search websites like Realtor.com, Zillow, and the local multiple listing service (MLS). 

This post provides general personal finance or consumer decision-making information and does not address all the variables that apply to an individual’s unique situation. It does not endorse specific products or services and should not be construed as legal or financial advice. If professional assistance is required, the services of a competent professional should be sought.