News Archive

"IRS regulations ... say that, even though an ex-spouse has a separate account, she must start taking RMDs when the participant reaches age 73 (or 75). The IRS rules go on to say that when RMDs start for the ex-spouse, she gets to use her own single life expectancy factor to calculate RMDs. Unfortunately, it's not clear which IRS life expectancy table should be used."  MORE >>

"[C]ustodians will typically transfer all the assets from the deceased IRA owner's account to the beneficiary, and then the year-of-death RMD can be paid out from the inherited account. But in this case, there was an extra layer of rules to consider. The surviving spouse wanted to do a spousal rollover ... However, if we processed a spousal rollover, and if the surviving spouse then took the year-of-death RMD before turning 59½, a 10% early distribution penalty would apply."  MORE >>

"[P]lan sponsors may wish to use the additional time provided by the delay to coordinate with recordkeepers on system readiness to implement any required or desired changes to address the Delayed RMD Regulatory Provisions. Plan sponsors should also document interim administrative positions to support reliance on the good-faith compliance standard[.]"  MORE >>

"By focusing only on tax efficiency during the owner's lifetime, advisors may overlook one of the most powerful benefits of Roth accounts. Roth accounts can help protect the next generation from avoidable tax erosion.... Distributions from a Roth IRA to beneficiaries are generally tax-free if the five-year holding period has been satisfied."  MORE >>

"IRS is delaying until Jan. 1, 2026, the effective date for some -- but not all -- of the proposal's provisions.... The effective date remains Jan. 1, 2025, for proposed provisions relating to see-through trusts and updates to the life expectancy and uniform lifetime tables. A separate provision establishing a methodology to value partial annuities for defined contribution plan RMDs was proposed to be effective Jan. 1, 2026."  MORE >>

"[B]ecause the IRS has already done the work of calculating withdrawal tables meant to gradually deplete a portfolio throughout retirement, the RMD method presents a relatively easy-to-understand strategy that doesn't require special software or decision trees to implement. And with a few simple modifications ... advisors can help their clients customize the RMD method to meet their own needs and ultimately reduce the uncertainty around drawing down their portfolio in retirement!"  MORE >>

"Presumably, using the IRS's own proposed RMD rules would be considered a good-faith interpretation of the SECURE 2.0 Act RMD provisions. Still, some in the industry may benefit from the extra time [provided by IRS Announcement 2026-7] to prepare their systems for compliance with the RMD rules."  MORE >>

"This announcement provides that the [Treasury Department and the IRS] anticipate that certain portions of final regulations relating to required minimum distributions (RMDs) under section 401(a)(9) of the Internal Revenue Code will apply for the distribution calendar year that begins no earlier than 6 months after the date that final regulations are issued in the Federal Register."  MORE >>

"[T]he main advantage of delaying until later in the year is a bit of extra tax-deferred compounding.... The big benefit to taking RMDs as soon as possible is to ensure that you don't forget and risk a penalty.  ... Taking distributions semiannually, quarterly, or monthly, with those distributions equaling the full-year RMD amount, helps ensure that you receive a range of prices for the assets that you sell."  MORE >>

"[S]ponsors of qualified and Section 403(b) plans have until December 31, 2027, to amend their plans for the RMD changes included in the 2025 RAL. The SECURE 2.0 RMD changes that were not included in the 2024 final regulations are expected to be included in a later RAL ... The 2025 RAL also states that the final regulations issued in 2025 regarding SECURE 2.0's Roth catch-up requirement for high earners are expected to be included in the 2027 RAL. If that proves to be the case, plan sponsors will have until December 31, 2029, to amend their plans to include the Roth catch-up provisions."  MORE >>

"RMDs ... have very much changed since the year 2017. And it turns out they're not all that onerous, and they don't require that large of a taxable distribution when they start, which, again, is age 75 for those born in 1960 and later."  MORE >>

46 pages; Nov 6, 2025; pub. Jan. 16, 2026. "Reminders: [1] Distributions to victims of domestic abuse.... [2] Distributions for emergency personal expenses.... [3] Transfers and rollovers of assets and the substantially equal payment method.... [4] The direct payment requirement for certain distributions for payment of health or long-term care insurance repealed."  MORE >>

"About 6.7% of Vanguard-held individual retirement account investors missed RMDs in 2024, resulting in total tax penalties of approximately $1.7 billion.... Owners of smaller Vanguard IRAs were more likely to miss RMDs -- with 56.8% of investors with balances under $5,000 missing their RMD in 2024, compared with 2.5% of investors with balances of more than $1 million."  MORE >>

Topics: [1] 2025 Required Amendments List for Qualified and Section 403(b) Plans: Notice 2025-60 ... [2] Notice 2026-02: Update for weighted average interest rates, yield curves, and segment rates ... [3] Required Minimum Distributions ... [4] Qualified Charitable Distributions.  MORE >>

"Taking no more than your RMD generally is advantageous because of tax-deferred compounding. But a larger distribution in a year your tax bracket is low may save tax. Be sure, however, to consider the lost future tax-deferred growth and, if applicable, whether the distribution could: [1] cause Social Security payments to become taxable, [2] increase income-based Medicare premiums and prescription drug charges, or [3] reduce or eliminate the benefits of other tax breaks with income-based limits, such as the new $6,000 deduction for seniors."  MORE >>

"The SECURE 2.0 changes that have most commonly been put into effect for such plans are [1] an increase in the small balance distribution limit from $5,000 to $7,000 and [2] an increase in the required minimum distribution age from age 72 under the SECURE Act of 2019 ... If a calendar year non-governmental 457(b) plan has operationalized either change, or both, a plan amendment will be needed to reflect the relevant changes by December 31, 2025[.]"  MORE >>

"This article explores ... compliance challenges, outlines relevant agency guidance and provides practical strategies for managing risk when participants due to commence distributions from a plan are unresponsive or uncooperative, for whatever reasons."  MORE >>

"[T]he RBD (when RMDs are officially 'turned on') is April 1 of the year after the year person turns age 73, or April 1 of the year after the year a person retires if using the still-working exception. You must live long enough to reach that date for RMDs to officially begin. [When an employee dies] before the RBD applicable to his 401(k) plan, there is no year-of-death RMD from the plan for his beneficiaries to worry about."  MORE >>

"The IRS requires that you take the proper amount from RMD-subject accounts by year-end, but the rules don't specify which investments you tap to meet those distributions.... [A]ssuming you don't need the RMD for living expenses, a transfer in-kind of securities from your IRA to a taxable brokerage account may make sense. Not only can it help you maintain the same market exposure, just in a different part of your portfolio, but the transfer may also reduce the taxes due on future appreciation when you eventually do sell."  MORE >>

"[T]he key point is that the INDB Strategy can potentially extend the distribution period by up to 50%, giving heirs more time and flexibility in managing cash flow and taxes. And because the strategy's success depends on understanding the IRS timing and rule constraints, financial advisors can play a critical role in both determining when it's appropriate and helping clients implement it effectively!"  MORE >>

"The fact that some of the people are not related to John does not disqualify them from being an EDB. Yes, the 'random guy on the train' would be an EDB on John's IRA simply because he is not more than 10 years younger than John. Being older qualifies. That's why John's father and his mailman are also EDBs."  MORE >>

"SECURE limited the ability of some inherited IRA beneficiaries to stretch their distributions from the IRA. Non-eligible designated beneficiaries and non-designated beneficiaries are restricted in their ability to stretch distributions beyond 10 years. Eligible designated beneficiaries, such as spouses, are still able to do the inherited stretch."  MORE >>

"[T]here is often a misconception that a converted RMD is a missed RMD. This is not the case. The RMD was taken from the traditional IRA, so no 25% penalty for missing the RMD would apply. Instead, a converted RMD is technically an excess contribution in the Roth IRA, so we follow the excess contribution correction rules."  MORE >>

"[U]nder the old rules, a trust with a mix of Eligible and Non-Eligible Designated Beneficiaries would have been automatically subject to the 10-Year Rule for Non-Eligible Designated Beneficiaries. Under the new rule, if the trust is divided into separate subtrusts for each beneficiary, the Eligible Designated Beneficiaries can each receive 'stretch' distributions over their own life expectancy -- while only the Non-Eligible Designated Beneficiaries will be subject to the 10-Year Rule. Notably, the IRS regulations only allow this 'separate accounting' treatment when the trust document includes a provision to divide the trust into separate subtrusts before the account owner's death."  MORE >>

"Your RMD is effectively cooked as of the year-end of the previous year. So, the RMDs that people are taking out for 2025 depend on whatever their balance was at the end of 2024. Of course, balances were elevated, so RMDs are a little high for 2025. If the market stays down for 2025, then people will see that reflected in the amounts that they have to take out for 2026. There's a little bit of a lag effect. There's not as much opportunity to add some art to when you take out your RMDs, as you might hope."  MORE >>