2020 RMDs

Lindsay Birchfield |

With everything happening right now, a lot of different parts of your life have been affected. From your health to your finances, it may be overwhelming to keep up with it all.

You have probably heard about the $2 trillion CARES Act that aims to provide relief to those impacted by the coronavirus pandemic. If you’re of retirement age or have inherited an IRA, this Act waives your Required Minimum Distribution (RMD) from your retirement accounts for 2020.

What does this mean?

  • You can keep money in your IRA to grow tax-deferred for future years.
  • Not taking an RMD will reduce your taxable income for 2020, because your RMD is included in your income for federal and state taxes.
  • The percentage of your Social Security that is taxable in 2020 could be reduced.

For a retiree, the RMD waiver from the CARES Act is a huge benefit. 2020 RMDs are based on substantially higher account values as of 12/31/2019, than the present. The Dow closed at 29,462 on 12/31/2019 and in early April, the Dow is hovering around 21,000. If not for the waiver, you would be forced to withdraw and pay tax on a much higher percentage of your IRA balance than intended by the RMD formula.


It is important to keep in mind that this Act does not prevent you from being able to withdraw from your retirement accounts. That is certainly still allowed, just no longer required for 2020!

-Lindsay Birchfield-