July 1, 2022 - Douglas Myser

Minimum distributions secure act. Due to the Covid pandemic and hundreds of thousands takin gout money from retirement accounts to get by, changes to retirement accounts were announced by Congress. Prior to the SECURE Act, individuals with an IRA, defined contribution or defined benefit plan were required to begin taking distributions no later than April 1st of the year after they turn 70 and a half. The SECURE Act raises that age to 72. The new age limit did not apply to individuals who turned 70 and a half prior to the end of 2019. Beginning in 2020, individuals are now able to continue making contributions to their IRAs no matter what their age, as long as they have earned income. Under prior law contributions were barred after the age of 70 and a half. Minimum distributions secure act.

The age of majority to determine whether a child of the deceased IRA owner qualifies as an eligible designate beneficiary is 21, even though in most states the age of majority is 18. The proposed regulations use the actual date of birth, not just the year of birth, to determine if the beneficiary is to more than 10 years younger than the decedent. The 10 year rule means by the end of the 10th year after death, even though the SECURE Act seemed to suggest the 10 year rule began on the date of death. The proposed regulations also provides answers on how RMDs would apply when there are multiple beneficiaries especially when the beneficiary is an IRA trust, and where there are beneficiaries that qualify for different benefits such as an eligible designated beneficiary and one who does not.

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