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Required Minimum Distributions Suspended for 2020

Cypress Wealth Services

March 2020


Last week Congress passed The CARES ACT (Coronavirus Aid, Relief, and Economic Security Act.) On Friday, we sent a summary of THE CARES ACT and covered the areas we thought would most impact our client base. Today we want to provide greater detail on the topic of Required Minimum Distributions (RMDs).

What is a Required Minimum Distribution?

Required Minimum Distributions (RMDs) generally 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 reach 70 ½ before January 1, 2020), if later, the year in which he or she retires. For example, clients who reach the above age with IRA accounts are forced to take a distribution and are taxed on the distribution.

How Has The CARES ACT Impacted RMDs for 2020?

RMDs are suspended for 2020. This means if you don’t need the distribution, you do not have to take it (aka you are not “required” for 2020.) Or, you have the option to reduce the amount as well. This includes distributions from “inherited” IRAs.

What Should You Do?

This may be a great tax planning opportunity. Speak with your financial advisor and tax professional. If you do not need the distribution, you can leave all the funds inside your retirement account or reduce the amount you take this year. However, you may want to take some distribution to use up deductions.


If you are impacted by RMDs and have questions, please contact us. We are here to help you maximize your approach for 2020!