Permalink Submitted by Alan - IRA critic on Tue, 2020-08-11 16:44
No, the 2020 RMD is permanently waived. However, because of that retirement account balances may be 4-10% higher going into 2021 than they would have been. Therefore, future RMDs will be slightly higher than they would have been without this waiver for those who did not distribute an amount that would have been a 2020 RMD. Some people are also converting an amount in 2020 that approximates their RMD. In that case, the future retirement account balance will be reduced as it would have been had RMDs not been waived, and the Roth balance not subject to RMDs will be increased.
Therefore, 2020 provides a unique opportunity to convert to Roth, possibly at a lower rate since there are no RMDs adding to taxable income in addition to any converted amount. The trade off by converting is passing on the chance for 2020 to be a low tax year, possibly even avoiding the inclusion of some SS income into your AGI creating a high tax rate while the SS income is being incorporated.
Permalink Submitted by Alan - IRA critic on Tue, 2020-08-11 16:44