CARES Act suspends 2020 RMDs

Dear Clients, Colleagues and Friends:

We hope you and your family are staying safe and taking care during this difficult time.  As you know, we are working remotely.  We are all still available during regular business hours and eager to help you.

We are sending this newsletter because one of the provisions of the recently enacted CARES Act directly impacts many of our clients.  The CARES Act changed the rules for required minimum distributions (RMDs) from retirement plans for 2020.

  • All RMDs from retirement plans (including IRAs, inherited IRAs, and employer plans, such as 401Ks) for 2020 are suspended.
  • If you are over 70 ½ or you are the beneficiary of an inherited IRA and you have not taken all of your RMDs for 2020 and do not wish to take the remaining RMDs, you do not have to do so. 
  • If you have taken RMDs, you may be able to roll them back into the plan if it is within 60 days of the distribution or, if it is more than 60 days, you may be able to contribute the distribution to an IRA. 
  • If you are under 59 ½ you may be able to take a penalty-free distribution or loan from your retirement plan, up to $100,000.  Generally, there is a 10% penalty for distributions before age 59 ½.  Income taxes on the distribution will still be due.

You should consult your financial advisor about your specific situation.  If your RMDs are distributed automatically, you may wish to reach out to your financial advisor to delay the distributions.

We understand this is a time of great anxiety.  We wish you continued good health and prosperity in the months to come.

Yours truly,

Dale Kaiser

Rachel Ziegler

Davina Lewis

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