Ask Liz Weston

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Liz Weston

Q&A: IRS changes on required withdrawals

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Dear Liz: When informing me of my required minimum distribution for 2022, my brokerage has apparently used a distribution period that differs from the one used in past years. This results in a distribution amount that’s noticeably smaller. I recall there was some talk of revising the IRS tables, but has this been done?

Answer: Yes. The IRS has updated the life expectancy tables used to calculate how much people must withdraw from their retirement accounts to reflect longer lifespans. That’s good news for people who withdraw only the minimums each year, since their required distributions will be smaller and the rest of their balances can continue to grow tax deferred.

Thursday’s need-to-know money news

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Today’s top story: How to budget realistically for home repairs. Also in the news: A new episode of the Smart Money podcast on small business owners who pivoted during covid, how a billion dollar jackpot actually works, and 5 ways to spend a billion dollars.

How to Budget Realistically for Home Repairs
If you’re a homeowner and haven’t faced a big repair bill yet, just wait.

Smart Money Podcast: Nerdy Business: Building a Brick-and-Mortar Business
This week, we talk with a business owner about how she opened a full-service beauty salon and bar, grew it to two locations with dozens of employees — and how she pivoted again and again during the COVID-19 pandemic.

Mega Millions: How a Billion-Dollar Jackpot Actually Works
The winner won’t see the full amount — at least not all at once. Here’s how to play, and what it means if you win.

Mega Millions: 5 Ways to Spend a Billion Dollars

Wednesday’s need-to-know money news

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Today’s top story: Fed raises target rate again. Also in the news: How big wheels cost you big bucks at the pump, how to cope with Airbnb cleaning fees, and how airline prices are going up in more ways than one.

Fed Raises Target Rate Again, but Mortgage Rates Are Unfazed
Each Federal Reserve announcement has resulted in a less dramatic change in mortgage rates than the one before.

How Big Wheels Cost You Big Time at the Pump
Big wheels and tires can add pizazz to your car, but they aren’t the best option for your wallet.

Airbnb Cleaning Fees Can Be Brutal. Here’s How to Cope
You can take the edge off of hefty cleaning fees with a longer stay, spreading the cost out over more days.

Airline Prices Are Going Up, in More Ways Than One
While base rates may be lower than they were a decade ago, fees and inflation have really done a number on overall costs.

Tuesday’s need-to-know money news

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Today’s top story: 3 times debt can be a helpful tool. Also in the news: How to buy stuff that lasts, how to plan for big expenditures, and how small daily purchases really affect your long-term finances.

3 times debt can be a helpful tool
When debt serves a purpose.

How to Buy Stuff That Lasts
Finding truly reliable and durable products isn’t always easy.

How to Afford Big-Ticket Items for the Year
If you need to make a big purchase this year, such as furniture or an appliance, plan around sales and your budget.

How Much Do Small, Daily Purchases Really Affect Your Long-Term Finances?
Your avocado toast or morning coffee is not to blame for your debt.

How to budget realistically for home repairs

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If you’re a homeowner and haven’t faced a big repair bill yet, just wait. Even in the best-maintained homes, stuff will wear out or break.

Budgeting for these inevitable bills isn’t always easy. One commonly cited rule of thumb — to save 1% to 4% of your home’s value each year for maintenance and repairs — can give homeowners sticker shock as real estate prices soar.

In my latest for the Associated Press, hot to decide on how much you should put aside for home repairs.

Monday’s need-to-know money news

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Today’s top story: 5 ways to protect yourself from Medicare fraud. Also in the news: A new episode of the Smart Money podcast on questioning the 50/30/20 budget, 5 credit card mistakes to avoid during tough times, and the cheapest places to buy an acre of land in the United States.

5 Ways to Protect Yourself From Medicare Fraud
Protect your Medicare number and review your statements to guard against Medicare fraud. If it does happen, help is available.

Smart Money Podcast: Questioning the 50/30/20 Budget, and Company Stock
This week’s episode starts with a discussion of the 50/30/20 budget — why it works and how to use it as prices soar.

5 Credit Card Mistakes to Avoid During Tough Times
By having a plan and knowing about less costly alternatives, you can avoid credit card mistakes that lead to debt.

The Cheapest Places to Buy an Acre of Land in the U.S.
There are still some (relatively) affordable places to put down roots.