Confused about first RMD withdrawal

Submitted by Geoffrey Kasher on Wed, 2019-09-25 12:58

Probably the millionth time this has been asked.

Client DOB is 2/18/49.

I know that her first RMD must be taken by 4/1/2020.

Here is the question.

The first RMD is for the accounts valued as of 12/31/18 or 12/31/19.

I also know that she must also make her second RMD by 12/31/2020. I assume that this RMD is calculated from the 12/31/19 values.

Thanks in advance.



Submitted by Alan - IRA critic on Wed, 2019-09-25 15:06

First RMD (for distribution year 2019) is based on 12/31/2018 balance. This RMD can be deferred in part or totally to as late as 4/1/2020. The 2019 year end balance is used for calculating the 2020 RMD and is not adjusted for deferral of the 2019 RMD to 2020. In other words, deferring the entire 2019 RMD to early 2020 will cause the 2020 RMD to be roughly 3.8% higher than it would have been had the 2019 RMD been completed in 2019.

Submitted by Geoffrey Kasher on Wed, 2019-09-25 15:14

That is what I thought. Thanks for confirming.  I have already done the 2018 distribution this year so as to not push into next year and have them pay addl tax.,  

Submitted by Alan - IRA critic on Wed, 2019-09-25 15:17

Think you meant that you did the 2019 distribution this year.

Submitted by Amanda Minter on Wed, 2020-01-29 19:03

I have the same questions but also looking for actual RMD % to be sure we are calculating correctly.  Assume the year end balance in both years is $500,000

Submitted by Alan - IRA critic on Wed, 2020-01-29 19:34

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