Q. I turned 71 in October 2020. I have not yet taken a Required Minimum Distribution (RMD) from my IRA accounts because of last year’s changes from COVID. What age line on the IRS RMD worksheet do I use to determine my RMD? Must I take my RMD by April 1? Am I only required to take one RMD this year?
— Retired
A. Figuring out your Required Minimum Distribution can be tricky because there have been several changes to the rules in recent years.
In December 2019, as part of a larger spending bill, Congress passed the Setting Every Community Up for Retirement Enhancement Act, commonly called the SECURE Act.
One of the provisions of the SECURE Act is that you will no longer be required to withdraw assets from retirement accounts such as IRAs and 401(k)s at age 70½, said Deva Panambur, a fee-only planner with Sarsi, LLC in West New York and an adjunct professor of personal finance at Montclair State University.
RMDs now begin at age 72 for those who turned 70½ in the calendar year 2020, he said.
In 2020, Congress passed the CARES Act, which waived the RMD requirement during 2020. This waiver included RMDs for those who turned age 70 ½ in 2019 and took their first RMD in 2020, he said.
:Since you turned 70 ½ in 2020, you are required to take your first RMD by April 1 of the year after you turn 72,” he said. “You turn 72 in 2021 so you have to take your first RMD by April 1, 2022.”
After your first RMD, you must take your RMD by Dec. 31 of each year including the year when you took your first RMD, Panambur said.
“If you take your first RMD in 2022, you will have to take your second one by Dec. 31 of that year,” he said. “To calculate the RMD for any year using the IRS worksheet, you will use your retirement account balance as of Dec. 31 of the previous year and your age on your birthday in the year for which you are calculating the RMD.”