In response to many inquiries from clients, below are the summaries of the most relevant facts regarding Required Minimum Distribution (RMD) requirements resulting from recent federal legislation.
Setting Every Community Up for Retirement Enhancement (SECURE) Act
Signed into law in December 2019, the SECURE Act included provisions which made significant impacts to some retirement accounts. The following are some, but not all, of the key changes of the SECURE Act.
Removes the prohibition on contributions to traditional IRAs by individuals who have reached the age of 70 with earned income.
Increased the age for required minimum distribution (RMD) for Individual Retirement Account (IRA) from 70 to 72 for individuals turning 70 in 2020 or later.
Coronavirus Aid, Relief, and Economic Security (CARES) Act
Signed into law on March 20, 2020, the CARES Act is designed to stimulate the economy. Below is a couple of the most noteworthy impacts of the provision:
Retirees are allowed to forego taking their Required Minimum Distribution (RMD) in 2020.
What you need to know
Individuals who are turning 70 in 2020 are not required to take an Required Minimum Distribution (RMD) until age 72.
Individuals may have already taken their Required Minimum Distribution (RMD) for 2020. As a result of the CARES Act, if they qualify, these individuals may request a 60-day rollover to re-contribute the amount back into their retirement accounts.
Ric Lager
Lager & Company, Inc.
