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What You Need to Know About Taking Required Minimum Distributions (“RMDs”) in 2020

Over the last few months, Congress has enacted two pieces of legislation that changed the rules on Required Minimum Distributions (“RMDs”) from qualified retirement accounts. The SECURE Act moved the commencement date for RMDs from the year you turn 70 ½ to the year you turn 72. The CARES Act, enacted in response to the coronavirus pandemic, essentially eliminated RMDs for the 2020 tax year. But even with all this RMD “relief,” few people are asking the question: “does it actually make sense to skip taking a distribution from your qualified retirement accounts?” 

Beyond Investing

CARES Act loosens rules on retirement savings distributions

The CARES Act provides several options to consider for those who are struggling financially as a result of the coronavirus outbreak. Chief among these options are the waiving of RMDs from qualified plans and IRAs for the current year, as well as providing those who have lost a job because of the pandemic, those suffering from COVID-19 or who have a spouse with the virus, to access up to $100,000 of their retirement savings without the usual 10% penalty.