If you are sitting down to do your taxes, or if you are getting ready to sit down with your accountant, here’s your friendly reminder that there are new rules for required minimum distributions from your retirement accounts.
In the past, those with retirement accounts had to take an RMD each year after turning 70 ½ or 72 – depending on a few factors.
But the Setting Every Community Up for Retirement Enhancement Act (or SECURE Act) changed all that. Under the act, if your 70th birthday is July 1, 2019 or later you don’t have to take your RMD until you turn 72.
And the Coronavirus Aid, Relief and Economic Security Act (or CARES Act) waived RMDs during 2020 for seniors and retirees – as well as people with inherited accounts.
It’s a good idea to sit down with a financial advisor or planner to talk about the new rules and how they apply to you, as it can be tricky.
Some people with workplace retirement plans who are still working can possibly wait to take an RMD, for example, as can those who work for public schools or some tax-exempt organizations.
Like anything relating to your retirement accounts, meeting with a qualified professional to discuss options and chart the best plan is a smart investment – especially in these unprecedented times where the laws are changing and the rules are evolving.
Here is a list of some tools and publications that might also be good to research. They can be found at IRS.gov.
- FAQs regarding Required Minimum Distributions
- Individual Retirement Arrangements (IRAs)
- Publication 590-B, Distribution from Individual Retirement Arrangements (IRAs)
- Coronavirus Relief for Retirement Plans and IRAs
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