Important RMD Information – Action Required

Executive Summary

  • SECURE Act moves RMD age to 72
  • CARES Act declares RMDs not required in 2020
  • Bottom line – Action or No Action?

You are receiving this email because you are age 70 or older and in the past few months there have been changes to the law regarding required minimum distributions (RMD) from an IRA or retirement account. Starting with the SECURE Act passed in December 2019 and now the CARES Act just passed, here is what you need to know—please note, you may need to take action by communicating your request with our office.


Beginning in 2020, this law changed the beginning age at which RMDs must start from 70.5 to the new age of 72. If you turned 70.5 in 2019, your RMDs are not delayed. However, most clients at Williams Financial who turned 70.5 in 2019 already began taking RMDs in 2019 and will continue taking it with only one exception, see below.

We will assume that you do not want to take a taxable RMD if you turn 70.5 or 71 in 2020. As always, if you need a distribution you may call our office anytime. Notably, for clients using a qualified charitable distribution (QCD) strategy to reduce taxes by giving directly from their IRA to a qualified 501(c)3 charitable organization, these distributions have not been affected and clients may still take them from IRAs as early as age 70.5.


In an attempt to stimulate the economy, the CARES Act (see previous email dated March 29, 2020 for details) declared a moratorium on taking RMDs from IRAs and other retirement plans in 2020. RMDs are calculated based on the value of the account at the end of the previous year and since many people have seen declines in their accounts, the act lets clients keep the money in their accounts with the potential to regain some of the market losses when the economy recovers. This includes Inherited IRAs as well.

What if you have already taken your RMD in 2020? Technically this distribution cannot be reversed, however, there are a couple of strategies that may allow you to return it in order to reduce or erase your tax liability.

First, if you have taken your RMD in the last 60 days, you can re-contribute it back into your IRA as a qualified rollover. Second, if you have been impacted by COVID-19 (generally meaning you or someone in your household got the virus, or if the virus negatively affected you financially by being unable to work or laid off), you may be able to count the distribution as a “coronavirus-related distribution” and the new law allows for re-contributions over the next three years. Unfortunately, none of these strategies work for Inherited IRA account owners who have already taken the RMD in 2020.

Action or No Action?

The bottom line is, we will assume that clients DO NOT want to take their 2020 RMDs, unless they have an existing automatic distribution set up. If you would still like to take your RMD please contact our office to process the distribution. If you do not contact our office, we will contact you by mid-December to confirm your decision not to pull your RMD in 2020.

I know this is a lot of information (imagine having to read the IRS Code!) so if you have any questions or concerns, please feel free to contact your financial planner.

Best, and stay safe and healthy!

James J. Williams, CFP®, MBA
CEO / Wealth Advisor
NAPFA-Registered Financial Advisor
Williams Financial, LLC
T: 866-986-4469 | F: 516-762-8531
30-Minute Client Phone Appointment

Albany, NY – 125 Wolf Road, Albany, NY 12205
Bennington, VT – 204 Union Street, Bennington, VT 05201
Leominster, MA – 14 Monument Sq., Suite 402, Leominster, MA 01453

Financial Planning and Investment Advisory Services are offered through Williams Financial Management LLC, a registered investment adviser. Please remember that securities cannot be purchased, sold or traded via e-mail or voice message system. Confidential: This email transmission and any documents, files or previous email messages attached to it may contain information that is confidential or legally privileged. If you are not the intended recipient, you are hereby notified that you must not read this transmission and that any disclosure, copying, printing, distribution, or any action or omission of this transmission is strictly prohibited. If you have received this transmission in error, please immediately notify the sender by telephone at 802-447-9769 or return and delete the original transmission and its attachments without reading or saving in any manner. Williams Financial Management, LLC is not a law firms or CPA firm. Williams Financial Management, LLC does not provide legal advice or opinions to any party or client. You should always consult your relevant regulatory authorities or legal counsel if applicable.

“Circular 230 Disclosure: IRS regulations require us to advise you that, unless otherwise specifically noted, any federal tax advice contained in this transmission (including any attachments, enclosures, or other accompanying materials) is not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties; furthermore, this communication was not intended or written to support the promotion or marketing of any of the transactions or matters it addresses.”