March 1, 2021 at 5:47 pm #15003
I have a family member who turned 72 in 2020. She has a large TIRA due to rolling over of her deceased spouse TIRA balance a couple of years ago. I calculated her 2020 RMD to be just under $40,000 which of course she didn’t have to take for 2020. The question is when is her Required Beginning Date. She said she read (but now can’t find the source) that since the RMD was suspended for 2020, her RBD will be April 1, 2022. But I don’t think so. Her first RMD year was 2020….suspending the RMD for 2020 does not change this, or so I reason, and so her 2021 RMD will have to be out by Dec 31, 2021.
Do you agree?March 1, 2021 at 6:34 pm #15005Kaye ThomasModerator
The rule allowing people to forgo the 2020 RMD does not change the required beginning date, so anyone who had a required beginning date of April 1, 2021 still has that date, and must take their 2021 RMD by the end of the year.
However, someone who turned 72 in 2020 must have reached age 70½ before 2020. The change in required beginning date applies to individuals who attain age 70½ after December 31, 2019. Therefore, this individual had a required beginning date of either April 1, 2019 or April 1, 2020, depending on whether her birthday is in the first or second half of the year. Assuming it’s April 1, 2020 (in other words, her birthday is in the second half of the year, so she reached age 70½ in 2019), she’s in the same position as if the age 72 rule applied, because both her 2019 RMD (payable by April 1, 2020) and her 2020 RMD (payable by December 31, 2020) were suspended, and her first RMD must be paid by the end of this year.March 1, 2021 at 7:09 pm #15007
Yes, that makes sense. Thanks
BruceMMarch 2, 2021 at 5:37 pm #15039
Ok, now you’ve done it…got me to thinking about what you said 🙂
With the SECURE Act, the new first RMD year is the age you attain 72, effective 2020 and beyond. So if my math is right, this means anyone who turned 70 in the first 6 months of 2019 will be the last age group to fall under the old RMD rules, meaning those born prior to July 1, 1949. Correct?
So if you were born on or after July 1, 1949, you fall under the new rules. But here’s where it gets interesting. For those born Jan 1 to June 30 1949, their RBD is April 1, 2020. But the next age group whose B-Day falls between July 1 – Dec 31, 1949, their RBD is April 1, 2022. So with the suspension of the 2020 RMD NOT delaying the RBDs, in effect, there is no April 1, 2021 RBD for anyone….correct?
BruceMMarch 2, 2021 at 6:20 pm #15040Kaye ThomasModerator
One reason for replacing age 70½ with age 72 was simplification, because of how confusing it can be to work with the half-year. What you’ve written looks right to me. The result isn’t surprising: when they increase the applicable age by a year and a half, there has to be a “skip” year in which no one has a required beginning date.March 2, 2021 at 6:53 pm #15042
Agree completely about the half-year confusion. Now, let’s see if legislator’s can change the 59 1/2 rules for IRA premature withdrawal penalties to some nice round number, like age 60.
BruceMMarch 2, 2021 at 8:52 pm #15047Alan S.Participant
Yes, in about 4 weeks distribution requests will be down from the typical year. No RBD.
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