The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) is a far-reaching bill with over 1,000 pages of text that detail the funding, loans, and tax provisions designed to provide economic relief to all Americans.
The CARES Act also includes changes that will directly impact you, as a IRA accountholder that is required to take mandatory distributions annually! One of the biggest retirement-related changes the CARES Act made was suspending all required minimum distributions (RMDs) from retirement accounts for 2020. These accounts include IRA’s, Inherited IRA’s, 401(k)s, 403(b)s and 457(b)s.
Being afforded the opportunity to forgo your RMD this year can be a huge benefit to you! If you don’t need to draw on your retirement accounts to fund your living expenses, skipping this year’s distribution could lead to a dramatically lower tax bill and allow your investments to regain value if the markets recover.
If you are turning 70.5 this year, there is good news also! The Setting Every Community Up for Retirement Enhancement Act (Secure Act), defers your necessity to take a required minimum distribution until the year is which you attain age 72.
Please do not hesitate to contact your Relationship Manager directly should you need clarification on how these two legislative changes affect you personally.