wealth distribution

What’s the deadline for my next IRA distribution?


Q. Because of the pandemic, we didn’t have to take our Required Minimum Distributions (RMDs). I’m not sure when the deadline for the next withdrawal is.

— Retired

A. You’re not the only one confused about future Required Minimum Distributions from retirement plans.

That’s because of several recent changes.

First, you’re correct that because of the CARES Act, any taxpayer with an RMD in 2020 from a defined-contribution retirement plan, including a 401(k), 403(b) or IRA, could skip those RMDs in 2020, said Bill Connington of Connington Wealth Management in Paramus.

This includes anyone who turned 70 1/2 in 2019 and would have had to take the first RMD by April 1, 2020, he said.

“In 2021, you will have to take your first RMD if you have reached the age of 72,” he said. “One thing to keep in mind is if you push the 2021 RMD until April 1, 2022, you will still owe the 2022 RMD by Dec. 31, 2022 and potentially create two taxable distributions in the same year.”

Due to changes made by the SECURE Act, if your 70th birthday is July 1, 2019 or later, you do not have to take withdrawals until you reach age 72, the IRS website says.

Remember that an RMD is calculated for each account by dividing the prior Dec. 31 balance of the retirement plan account by a life expectancy factor table published by the IRS, Connington said.

Email your questions to Ask@NJMoneyHelp.com.

Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.


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