If you’re turning age 70½ in 2020 and you own an IRA, it’s quite possible your custodian—the financial institution that holds your IRA—may send you a notice saying that you have to take a Required Minimum Distribution or RMD in 2020.
You can ignore that notice. It’s wrong.
The Setting Every Community Up for Retirement Enhancement (SECURE) Act, a new law enacted late 2019, includes a number of retirement savings provisions. And one of those provisions has to do with the required beginning date for IRA account owners.
The new date for an IRA owner is April 1 of the calendar year following the calendar year in which the individual attains age 72. Previously, it was April 1 of the calendar year following the calendar year in which the individual attains age 70½.
As a result of this change, the IRS says IRA owners who will attain age 70½ in 2020 will not
have a required beginning date of April 1, 2021. This means that these IRA owners
(who, prior to the enactment of the SECURE Act, would have been required to take
minimum distributions from their IRAs for 2020) will have no required minimum
distribution (RMD) for 2020.
Unfortunately, some financial institutions might be sending out incorrect notices to IRA account owners The IRS says financial institutions have until April 15 to notify certain account holders that no RMD is due for 2020 and must send out corrected letters by April 15.
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