by Jeff Deiss, CFP

Facts:  Taxpayers who are age 72 or older (or those who turned 70 ½ before December 31, 2019) are required to withdrawal minimum distributions (RMDs) from their retirement plan accounts on an annual basis.

The CARES Act passed on March 27, 2020 enabled any taxpayer with an RMD due in 2020 from a defined-contribution retirement plan, including a 401(k) or 403(b) plan, or an IRA, to skip those RMDs this year.  This includes anyone who turned age 70 1/2 in 2019 and would have had to take the first RMD by April 1, 2020. This waiver does not apply to defined-benefit plans.

Action Plan:  You have a choice. There is no prohibition on taking distributions from your retirement plan accounts (although income taxes apply to most distributions and an additional 10% penalty may apply to distributions taken before the age of 59 ½).  But you are not required to take a distribution in 2020, which may reduce your taxable income this year and allow the assets in your retirement plan accounts more time to grow.

Required Minimum Distributions will be required again in 2021.

If you have any questions on Required Minimum Distributions from your IRAs, Inherited IRAs or other qualified retirement plans, please contact your ACM Wealth Advisor.

ACM is a registered investment advisory firm with the United States Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training. All written content on this site is for information purposes only. Opinions expressed herein are solely those of ACM, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful. ©ACM Wealth

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