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Required Minimum Distributions (RMDs)

The SECURE Act went into effect Jan. 1, 2020 and it significantly changes the Required Minimum Distribution (RMD) requirements for inherited accounts by increasing the age that you are required to start your RMDs to age 72, if you have not reached age 70.5 by the end of 2019.

Once you hit your required beginning date for RMDs, now 72 for most situations after the SECURE Act, you have to take your first RMD by at least April 1 of the year after you reach 72. So, if you reach age 72 in 2021, you need to take your first RMD by April 1, 2022 (this counts as your 2021 distribution). Any distributions for subsequent years need to be taken by December 31st of that year. The RMD for any year is typically the account balance as of the end of previous year (Dec. 31) divided by a distribution period from the IRS’s “Uniform Lifetime Table.”

The Cares Act suspended required minimum distributions (RMDs) for 2020 for certian defined contribution plans and IRAs, RMDs pick back up in 2021.