Required Minimum Distributions Update

Following are current requirements regarding RMDs.

When the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020, it suspended required minimum distributions (RMDs) from defined contribution plans (like 401(k) and 403(b) plans), and IRAs in 2020 to taxpayers who would have been otherwise required to take RMDs. That suspension ended on December 31, 2020.

Current RMD Requirements

The Internal Revenue Code generally requires retired individuals to begin taking annual withdrawals from their employer-sponsored defined contribution retirement plan after they reach age 72 (age 70½ if born before June 1, 1949). The exception to this is if they are a 5% owner of the business sponsoring the plan, in which case their RMDs will begin even if they are still working.

In general, RMDs from Traditional IRAs, including SEP and SIMPLE plans, must be taken by individuals by April 1 of the following calendar year in which they turn 72, even if they are still working. If you have any questions about RMDs, please contact your local Mutual of America representative.

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