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Cares Act And Changes To Required Minimum Distributions

Recently, the Coronavirus Aid, Relief, and Economic Security Act, more commonly known as the CARES Act, was signed into law. Some aspects of the coverage revolve around rebate checks, the postponement of tax filing season, as well as one significant change we wanted to bring to your attention.

Per the CARES Act, individuals will see a temporary waiver of Required Minimum Distribution (RMD) Rules for 2020. More simply, RMDs on accounts that are RMD eligible (IRAs, Inherited/Beneficiary IRAs, 401(k)s, 403(b)s and governmental 457(b) plans) will not need to be satisfied for this calendar year. This provision of the CARES Act is applicable to all individuals, not just those who are affected by the coronavirus.

What does this mean for you and your RMD?

If you have your RMD set up to process automatically, either through monthly income or a one-time scheduled distribution, but don’t feel you will need it, please contact your advisor to discuss what steps may be needed to adjust your standing instructions. If you already satisfied your RMD for 2020 and are wondering if you have options available to you, please reach out to your advisor.

Additionally, individuals will still be able to gift to charities directly from their IRAs. Qualified Charitable Distributions (QCD) can count towards an individual’s RMD requirement. It is important to note that you don’t need to have an RMD to be able to make a QCD. Consult with your advisor to see if continued gifting from your IRA still makes sense for this year.

Stay safe and stay healthy,

Bernicke Wealth Management

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Bernicke Wealth Management, Ltd. (Bernicke) is an independent, multi-disciplinary firm with 25 employees located outside Eau Claire, in Altoona, Wisconsin. Our financial advisers provide wealth management services for individual investors, businesses, foundations, and nonprofits, including investment planning, retirement planning, estate planning, and tax planning.

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Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Great Valley Advisor Group, a registered investment advisor. Great Valley Advisor Group and Bernicke Wealth Management are separate entities from LPL Financial. The LPL Financial registered representatives associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.

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