New “Required Minimum Distribution” (RMD)

With the passage of the SECURE Act late last year by Congress, there were some substantial changes to the rules governing mandatory IRA distributions. 

First, the required beginning date for RMD’s was changed from Age 70½ to Age 72.  Thus, if you were born on or after July 1, 1949 you have until they year you turn 72 to begin taking RMD’s.  Conversely, if you were born June 30, 1949 or earlier (and thus turned 70½ in 2019) your RMD’s must start no later than April of 2020. 

Secondly, “Stretch” provisions for IRA’s inherited by someone other than a spouse have been mostly eliminated.  Under the old rules, an IRA inherited by a non-spousal beneficiary could take RMD’s based on life expectancy.  The new rules mandate inherited non-spousal IRA’s must be distributed within 10 years.  If the original IRA owner died in 2019, the old rules apply.   

If you are confused as to whether the old or new RMD rules apply to you, please consult your financial advisor for clarification. 

This is meant for educational purposes only.  It should not be considered investment advice, nor does it constitute a recommendation to take a particular course of action. Please consult with a financial professional regarding your personal situation prior to making any financial related decisions. (03/20)