If you are like most people, you have seen a lot of ups and downs in 2020. The global pandemic has left no industry untouched, including the retirement plan business. And that begs the question: What is the required minimum distribution for 2020?
It’s a good question to ask, as there have been several changes to retirement plans already this year!
The CARES Act (which stands for the Coronavirus Aid, Relief and Economic Security Act, passed in late March of this year) spelled out that certain retirement plan holders (mainly IRAs and some defined contribution plans) could waive required minimum distribution in 2020.
Further, the SECURE Act (which stands for Setting Every Community Up for Retirement Enhancement Act, signed into law in late 2019) already raised the age for RMD’s from 72 – up from 70 ½.
The CARES Act also sets some other provisions, namely that if you already took your for RMD, you have until Aug. 31, 2020 to repay it or roll it over – if you no longer need the money. It also waived some requirements for rollovers, like limiting plan holders to one rollover per 12 month and waiving a 60-day limit.
In addition, if you have a non-spouse beneficiary on an inherited IRA, you can also repay the for required minimum distribution by Aug. 31, 2020, and if you turned 70 ½ in 2019 and deferred your initial for required minimum distribution, you can get relief.
Also, for those who turn 72 in 2020, you may also be eligible for relief from your first for required minimum distribution.
It’s up to each retirement plan holder to decide what is best, but there are options! You can forgo or repay your for RMD if you meet these criteria.
It’s best to talk to a qualified financial advisor about your options so you can make the best decision about how to take your required minimum distribution – or not.
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