What are the Required Minimum Distributions from IRAs: Age 70 ½ or Age 72?

February 13, 2020 | by Doug Parham, CPA

Prior to a law change on December 20, 2019 (The SECURE Act) Required Minimum Distributions (RMD) applied once an IRA owner reached age 70 ½.The SECURE Act changed the “starting age” for RMDs from age 70 ½ to age 72 for those who turn 70 ½ on or after January 1, 2020.

Those in that 70 ½ to 72 age range as of December 31, 2019 do not get a break from taking an RMD for two tax years.

Prior to January 1, 2020 your “starting year” for the RMD was the year you turned 70 ½.  After December 31, 2020 the “starting year” for the RMD is the year you turn 72.  Once your reach the “starting age” there is no such thing as a “stopping age or date”.  Therefore, if you were 70 ½ prior to January 1, 2020 your “starting age” for RMD occurred and you will continue to have an RMD.  If you were not yet 70 ½ by December 31, 2019 then you will not have an RMD until the year in which you reach the new “starting age” of 72.

Another matter affecting the RMD calculation is the life expectancy table.  From time to time the IRS revisits the life expectancy table. There is a new life expectancy table that will become effective for distributions in 2021.  The revised tables allow distributions to be spread over more years.  Life expectancies have increased from one to two years.  All distributions will be affected by the new tables, not just people reaching their starting date after the new table comes into play.  The last time the IRS revised the table was 2002.

To recap:

  • Those who reached age 70 ½ as of December 31, 2019 must continue taking RMDs in 2020 and future years
  • Those who will reach age 70 ½ on or after January 1, 2020 must now wait until the year they reach the age 72 before taking RMDs
  • IRS revised life expectancy tables for the first time since 2002.
  • All distributions, starting in 2021, will be affected by the new tables

Contact your BC+S tax advisor if you have questions about how the SECURE Act may affect your retirement distributions.