The market tanked.. do I really have to take my RMD this year?

If you are over 70-1/2, you have been dutifully taking your Required Minimum Distribution (RMD) from your retirement plans each year.  The 2020 RMD is calculated by looking at the 12/31/19 balance in your retirement plans, dividing by a factor representing life expectancy, and that is the amount you have to take out in 2020. For many people, the 12/31/19 balance in their retirement plan was quite healthy! Then, the market crashed due to fears of COVID-19, and now your retirement plan is worth a lot less than it was 3 months ago and you seemingly have to sell low to get your RMD amount.

Good news is that the CARES Act has suspended all 2020 RMDs (Section 2203). So, you do not have to take your 2020 RMD if you do not want to or do not need to. This will (hopefully) allow your retirement account to recover.

If you already took your RMD for 2020, then you have 60 days to return it and have it not count for 2020 (i.e. it will be treated as an indirect rollover).

If you want or need your RMD for 2020, then go ahead and take it.


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