RMDs - what is the definition of "retirement" Featured

Here's what the IRS has to say about that:

"You cannot keep retirement funds in your account indefinitely. You generally have to start taking withdrawals from your IRA, SIMPLE IRA, SEP IRA, or retirement plan account when you reach age 70½. However, changes were made by the Setting Every Community Up for Retirement Enhancement (SECURE) Act which was part of the Further Consolidated Appropriations Act, 2020,P.L. 116-94, signed by the President on December 20, 2019. Due to changes made by the SECURE Act, if your

If it's an inherited IRA, RMD's have to start the year of the inheritance.

In article <XnsAC178F7268773spamtraplexregiacom@130.133.4.11> you write:

Are you sure? I thought the new rule is it has to be distributed over

"John Levine" snipped-for-privacy@taugh.com wrote

Thank you. That is actually how I remembered it from long ago, but somewhere (I can't find it now) I read something that made it sound like RMDs were not required if you had not yet retired, regardless of your age. I knew that wasn't how it was in the past, but things change. Not this, so thanks for letting me know.

Hmn. I have an IRA inherited from someone who died in July 2019, but the IRA wasn't distributed until this March. If it matters, the decedent took his 2019 RMD, and was not my spouse.

Looking at Pub 590-B, it looks like the old rule applies, any time over 5 years, or over my life expectancy from Table I.

To answer the specific question, you need to know what type of retirement plan the taxpayer has. RMDs from IRAs cannot be deferred simply because you are not retired. RMDs from 401(k) accounts may be deferred if you are still employed by the employer who established the plan *if* the plan document allows it. (Not all do)

Ira Smilovitz, EA Leonia, NJ

One is not required to take an RMD from an "employer" retirement plan (IRA is not an employer plan), for as long as one continues to work for that same employer. This is true if the plan document allows it, on top of the tax rule.

Maria U. Ku, CPA Oakland, CA

You are correct that the old rule applies. You didn't state whether the owner died on or after the RBD or before the RBD. Your answer implies the owner died before the RBD as the 5 year rule does not exist for beneficiaries whose IRA owner died on or after the RBD.

He was way past the RBD and had been taking his RMD for a long time. Staring at Pub 590-B now I see the bit about RBD, so in my case I have to take RMD based on my life expectancy.

Adding to the confusion, there were two beneficiaries 50/50, but my half has already been split out into a separate account so I believe we each have RMDs from our accounts based on our respective ages.

...but not in 2020 unless you want to take a distribution.

I'll just add - keep in mind, the Inherited RMD calculation is different from the RMD for one's own account.

For inherited, you find the divisor the first year, but never return to the table, you simply subtract '1'.

e.g. you are 50, and the divisor is 34.2. Next year, the divisor is