Hope you’re well and staying healthy! As you know, we (both as individuals and as a country) have gone through many changes lately due to the impact of the COVID-19 coronavirus and federal lawmakers’ response to it via the CARES Act. One of those changes is really important to retirees, and it has to do with Required Minimum Distributions (RMDs). Historically, anyone older than 70.5 was required to withdraw a certain amount each year from their retirement accounts, or be subject to a penalty from the IRS. The RMDs were an absolute requirement, regardless of whether you actually needed the money in-hand or not. In 2019, the rules changed slightly, and raised the age for beginning RMDs to 72.
Now, though, and at least for the remainder of 2020, you do NOT have to take those RMDs. And if you were required to start taking your first year of RMDs in 2019, but still hadn’t taken them by April 1, 2020, you can skip the 2019 withdrawal too. This way, the money can stay in your tax-advantaged retirement accounts and continue to grow or recover with the market. No deadlines to miss, no penalties to pay, and one less thing to think about during this very unusual time.
If you have questions about the new RMD rules, or are concerned in any way about your specific requirements for RMDs, we’re here to help. Please reach out!
Skip your RMDs in 2020!
August 22, 2020