Answering the most common questions on IRA distributions

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Here are the most common questions we get from clients about taking distributions from their Regular IRAs, as well as their inherited IRA accounts.

Regular IRAs

#1 Who does and doesn’t have to do Required Minimum Distributions (RMD’s)?

Beginning at age 73, you must take RMD’s from your retirement accounts (IRAs, 401ks, etc.). If you already began in the past, if you had RMD’s in past years based on your age at that time, you follow the same rules.

If you already started in a prior year, you have to continue now.

#2 Can I skip an RMD one year?

No, you cannot skip RMD’s. There were exemptions during COVID-19 that allowed owners of IRAs to skip taking RMD’s, but those exemptions no longer apply.

This rule applies to Regular IRAs as well as Inherited IRAs.

If you inherited an IRA years ago, before January 1, 2020, you have to follow the rules in place at that time. If you are obligated to take annual distributions, the same rule applies.

Inherited IRA’s

#3 Do I still have to take distributions from an inherited IRA, even if I wasn’t the original owner of the IRA?

Yes, even if you inherited the account from another person instead of starting it yourself, anyone who is the owner of such an account must take these distributions.

#4 How long do I have to take RMD’s for, after I inherit an IRA?

If you inherited an IRA after January 1, 2020 from someone who was not your spouse, you have to take all your distributions within a 10-year time period. In other words, the account must be fully emptied by the tenth year after the original owner died.

If you inherited an IRA before January 1, 2020, you must follow the rules in place at the time you inherited the IRA account.

We’re just getting started – the list of questions about IRAs is long. There are exceptions requiring unique planning to be done for people in certain circumstances.

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