As I’m sure you know, the $2 trillion “Coronavirus Aid, Relief, and Economic Security” (“CARES”) Act was recently signed into law. The CARES Act is designed to help those most impacted by the COVID-19 pandemic, while also providing key provisions that may benefit retirees.
The CARES Act has far-reaching implications for many. I am only going to discuss the option that allows you to suspend your Required Minimum Distributions (RMDs) from your retirement accounts and IRAs. RMDs are minimum amounts that a retirement plan account owner must withdraw annually, starting with the year that he or she reaches 72 (70 ½ if you reached 70 ½ before January 1, 2020).
The CARES Act suspends the RMDs most people must take from retirement plans and IRAs in 2020. People who have an inherited or beneficiary IRA can suspend distributions in 2020 as well. Required distributions don’t apply to people with Roth IRAs, although they do apply to investors who inherit Roth IRA accounts.
Already taken your RMD for 2020? Technically, the distribution can’t be reversed. However, the CARES Act seems to allow you to re-contribute the funds back into your retirement account within 60 days and allow it to be considered a rollover. This could get tricky, so if you need help considering this option, please reach out to us or another qualified professional.
Many businesses and individuals within our community are struggling with the new realities that COVID-19 has created. The CARES Act, however, may provide some much-needed relief for our neighbors, friends and loved ones.
Information in this material is for general information only and not intended as investment, tax or legal advice. Please consult the appropriate professionals for specific information regarding your individual situation prior to making any financial decision.
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