IRS updates RMD guidance for inherited IRAs

Financial Planners

David T. Mayes

Over the past few years, we have seen many changes made to the required minimum distribution (RMD) rules that apply to traditional IRA and 401(k) accounts. The age at which these distributions must begin for account owners has been pushed out to age 73, new life-expectancy tables have been implemented to acknowledge that retirees are living longer, and, in perhaps the most impactful change for the US Treasury, the fact that non-spouse beneficiaries can no longer stretch withdrawals from retirement accounts over their own life expectancy. Instead, these inherited accounts must be emptied within 10 years of the owner’s death. This change, made under the SECURE Act of 2019 was dubbed the death of the “stretch IRA” and was designed to accelerate the receipt of tax revenue from IRAs after they are passed on to children.

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