SECURE Act Required Minimum Distribution Q&As

In general, the SECURE Act increased the age for required minimum distributions (RMDs). Under previous law, participants were generally required to begin taking distributions from their retirement plan at age 70½. However, the age 70½ was first applied in the retirement plan context in the early 1960s and has never been adjusted to account for increases in life expectancy. The provision increases the required minimum distribution age from 70½ to 72 for distributions made after Dec. 31, 2019, for individuals who attain age 70½ after such date.

Q1: We have a participant who will be 70½ later this year who has just retired and is requesting a distribution. Should we assume that we can rely on the new rule for age 72, not take an RMD and allow a full balance rollover?

A1: Yes, you can.

Q2: Has any type of sample letter or notice been prepared that could be used to relay this information to our clients?   

A2: Not that we’ve seen.

Q3: For IRAs, we should just go to age 72 with no real worries about guidance, since there is no plan document dictating the age 70½ distribution. Is this correct?

A3: The IRS Form 5305 does state age 70½. The IRS generally is lenient on amendments to IRAs, but we expect we’ll get some guidance from the IRS on this.

The topics addressed on this page are for information purposes only and should not be construed as specific tax or retirement plan advice. Individuals should consult a tax advisor or attorney for questions regarding specific tax or legal needs.