Required Minimum Distributions (RMDS)

In December 2019, Congress passed the Setting Every Community Up for Retirement Enhancement Act (the “SECURE Act”). The SECURE Act intends to strengthen retirement security by enacting key changes to existing rules, including increasing the age at which RMDs must commence for traditional Individual Retirement Account (IRA) holders (“participants”) to age 72. Prior to the passage of the SECURE Act (“the Act”), participants had to begin taking RMDs at age 70 1/2.

Under the Act, RMDs are extended to age 72 for participants reaching age 70 1/2 after December 31, 2019. IRA distributions by participants reaching age 70 1/2 January 1, 2020, and after, will be coded as normal distributions until age 72.

This change does not impact participants who turned 70 1/2 in 2019 or prior.

  • Participants who reached age 70 1/2 in 2019 who will be taking their first RMD must do so by April 1, 2020.*
  • Participants already receiving RMDs must continue their distributions in 2020, completing them by December 31.

If you do not comply with RMD requirements, the IRS may impose a 50% penalty tax on the amount that should have been distributed.

Please consult your tax preparer if you have questions.