This year has been quite disruptive in many ways, including the IRS rules governing required distributions from retirement accounts. To remind you, important updates that became effective in 2020 include:
- Required minimum distributions from all plans were suspended (only for 2020) as part of COVID 19 relief legislation.
- The required beginning date for minimum distributions was moved from age 70 ½ to 72.
- Notably, the eligibility to make charitable gifts (QCDs) from IRAs was left at age 70 ½.
- The rules governing required distributions for non-spouse beneficiaries of retirement plans were substantially revised, such that account balances must be withdrawn over ten years.
While there are no required distributions for 2020, we do expect those distributions to resume in 2021. Those making charitable gifts from IRAs may want to consider waiting until January to make them, which would allow the gift(s) to count against the 2021 required distribution.
Please contact your advisor to discuss how these IRS rules may impact your circumstances.