As 2022 comes to an end, here’s advice that can save you money, help you avoid penalties, and ensure that your IRA (individual retirement account) proceeds are distributed as you wish.

1. Convert your traditional IRA to a Roth IRA.
    If you’ve been planning to convert your traditional IRA to a Roth IRA, but just haven’t gotten around to it, consider converting before year-end, especially if you anticipate being in a higher tax bracket next year. You will pay taxes on all pretax assets that you convert, but not the 10% early distribution penalty tax, regardless of your age at the time of conversion. Once you convert, you’ll have the advantage of tax-free growth in a Roth IRA, and you’ll avoid required minimum distributions during your lifetime—allowing you to pass along tax-free IRA assets to your heirs.
2. Take any required minimum distributions.
    If you’re age 70½ or older, you must take a required minimum distribution from your traditional IRA by year-end or pay a 50% excess accumulation penalty tax on the amounts that you should have taken—but didn’t. If you just turned age 70½ in 2022, you can delay your required minimum distribution until April 1 of the year you reach 72 years. As an IRA owner, you’re responsible for taking your required minimum distribution by the deadline. Many credit unions assist their IRA owners with calculating required minimum distributions, so check with the professionals at your credit union if you have questions.
3. Make a qualified charitable distribution.
   If you’re age 70½ or older, you can take a tax-free distribution of up to $100,000 from your traditional or Roth IRA if you have it paid directly to a qualified charity. You can use the qualified charitable distribution to satisfy your required minimum distribution.
4. Review and, if necessary, update your IRA beneficiary designation.
   If you haven’t reviewed your IRA beneficiary designation recently, you should do so before year-end to ensure that your IRA proceeds are distributed in accordance with your wishes. Were you married last year, divorced, have a new baby or a new grandchild, or was there a death in the family? Any of these life events are reasons to review your IRA beneficiary form to make sure that it still reflects your wishes.