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I am unclear on how the new RMD rules apply to someone caught in the transition:

Ex 1:  DOB 10/27/48 (turned 70 1/2 in 2019, turns 72 in 2020):

  • If participant in DB plan would have had first RMD due for 2019, but chose to delay until 04/01/20.  Now since she hasn't yet started benefits yet, is 2020 now her first RMD (which could be delayed until 04/01/21), or does she still have to start by 04/01/19?

Ex 2:  DOB 04/01/49 (turned 70 1/2 in 2019, turns 72 in 2021):

  • If participant already took 2019 RMD, does she still have to take RMD for 2020 or does she skip that and pick up again for 2021?
  • If participant hasn't yet taken 2019 RMD (delayed until 04/01/20), does she still take it or wait until 2021?  And if taken again the question does she also take for 2020 or skip that. 

 

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People who turned 70.5 prior to 12/31/2019 have a first RMD year of 2019 RMD and contine to have RMDs "under the old rules"

People who do not turn 70.5 until after 12/31/2019 come under the new rules and do not have a first RMD year until the year they attain age 72.

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21 minutes ago, Cynchbeast said:

I am unclear on how the new RMD rules apply to someone caught in the transition:

Ex 1:  DOB 10/27/48 (turned 70 1/2 in 2019, turns 72 in 2020):

  • If participant in DB plan would have had first RMD due for 2019, but chose to delay until 04/01/20.  Now since she hasn't yet started benefits yet, is 2020 now her first RMD (which could be delayed until 04/01/21), or does she still have to start by 04/01/19?

Ex 2:  DOB 04/01/49 (turned 70 1/2 in 2019, turns 72 in 2021):

  • If participant already took 2019 RMD, does she still have to take RMD for 2020 or does she skip that and pick up again for 2021?
  • If participant hasn't yet taken 2019 RMD (delayed until 04/01/20), does she still take it or wait until 2021?  And if taken again the question does she also take for 2020 or skip that. 

 

First, there is no transition. You are either under the old rules or the new rules.  If you turned 70 1/2 in 2019 (or earlier), you are under the old rules. If not, you are under the new rules.  Example 1: old rules.  Example 2: old rules. 

Neither of these have access to the change in rules.  There are NO transition rules; it's black and white (if that's still politically acceptable).

Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC
President
Qualified Plan Consultants, Inc.
46 Daggett Drive
West Springfield, MA 01089
413-736-2066
larrystarr@qpc-inc.com

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