Secure Act – Retroactive application of RMD rule?

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  • #3631
    caesark
    Participant

    Does anyone know if the current version of the bill would allow retroactive application of the change in RMD age to 72?

    If someone turns 70 1/2 this hear and the Bill passes, how likely is it they will be able to delay RMDs to age 72?

    #3647
    Alan S.
    Participant

    While the final law could vary in several respects, it is expected that it will be effective 1/1/2020 at the earliest. That means someone reaching 70.5 before 2020 will have the year reaching 70.5 as the first RMD distribution year. The actual 4/1 required beginning date does not affect this. Once RMDs begin, they must continue. Therefore, in your example the person would have to take an RMD for 2019, 2020 etc. On the flip side, if an IRA owner passes in 2019, their non spouse beneficiaries will likely retain their full life time stretch.

    For an employer plan, if the participant is still working and has reached 70.5, they may want to delay retirement since their first RMD distribution year will be the year of retirement (unless >5% owner). If the law takes effect in 2020, they would just have to delay retirement to the first week of January, 2020 to prevent RMDs from starting in 2019.

    • This reply was modified 2 years, 2 months ago by Alan S..
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