Skip to main content

If you reach age 70½ in 2020 and you own an IRA, it's possible you might receive a notice from your custodian -- your bank, brokerage firm, insurance company, credit union, mutual fund firm -- saying that a required minimum distribution, or RMD, is due for 2020.

You should disregard this notice; it's incorrect, says Denise Appleby of Appleby Retirement Consulting.

Why so? Well, under the Setting Every Community Up for Retirement Enhancement Act of 2019, better known as the SECURE Act, IRA account owners who reach age 70½ in 2020 now don't have to take an RMD until they reach age 72.

Prior to the enactment of the SECURE Act, IRA owners who attain age 70½ in 2020 would have had a required beginning date of April 1, 2021.

Now the IRS has now acknowledged the potential predicament that such an RMD notice might cause, and has offered relief, in Notice 2020-6, to IRA custodians who send out such a notice, says Appleby. In essence, financial institutions have until April 15 to notify certain account holders that no RMD is due for 2020.

The text of IRS Notice 2020-06 can be found here.

The SECURE Act, which originally passed the House in July, was approved by the Senate and then passed into law in late December. Among other things, the new law pushes back the age at which savers need to take RMDs, and allows traditional IRA owners to keep making contributions indefinitely.