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In the May 8, 2024, Slott Report, we published a “cheat sheet” summarizing the confusing SECURE Act rules for beneficiary IRA (and company plan account) required minimum distributions (RMDs).

The holidays are upon us. There is shopping to do, gifts to wrap, and parties to attend. Amidst the hustle and bustle of the season, you may be forgiven if your retirement account is not at the top of your mind. However, for some retirement account owners and beneficiaries, a very important deadline is looming. December 31 is the deadline to take 2024 required minimum distributions (RMDs) for many individuals.

Year after year, this topic continues to bubble up. Confusion exists over when a QCD can be done in relation to the RMD. Qualified charitable distributions (QCDs) can offset all or a portion of an RMD (required minimum distribution). However, for whatever reason, the sequencing of these items (QCDs and RMDs) confounds people. Let’s set the record straight, starting with some QCD fundamentals:

Get ready! Several new 401(k) provisions from the SECURE 2.0 Act kick in on January 1, 2025. One that we’ve already written about is the ability of employees to make extra catch-up contributions in a year they turn age 60, 61, 62 or 63 by the end of the year. (This “super catch-up” also applies to SIMPLE IRA participants.) Here are two others:

Each year it is a Thanksgiving tradition here at the Slott Report to take a moment to give thanks for the rules that are helpful to retirement savers. There are many times when rules governing retirement accounts can seem illogical, confusing, and maybe even unfair. However, there are other rules that work well and give us the tools necessary to not only save for a secure retirement but maybe even get a few tax breaks along the way.

When an IRA owner dies, what is the payout schedule for the beneficiary? The key to distinguishing the correct program (i.e., 10-year rule, stretch RMDs, 5-year rule, etc.) is to identify all the important variables. But there are so many! Nevertheless, each detail must be considered. Every scenario requires that we navigate through a mental flow chart. The correct answer lies at the end of every beneficiary maze.

Health Savings Accounts (HSAs) continue to become more popular. If you have a qualifying high deductible health plan, you may make deductible contributions to an HSA. Then, you can take tax-free distributions to pay for qualified medical expenses. Here is what you need to know about taking tax-free HSA distributions.

Question: If an IRA owner is over age 70 ½, can they do a qualified charitable distribution (QCD) even if their spouse makes a deductible traditional IRA contribution? Mark Answer: Hi Mark, There are some complicated rules that count deductible IRA contributions made after age 70 ½ against QCDs. However, these rules apply on a per person basis. What a spouse does is not considered. Your spouse can go ahead and make a deductible traditional IRA contribution. It will not affect your QCD. Question: In December of 2023 I requested a transfer of my IRA funds to a new custodian. The old custodian sent a check as a direct transfer to the new custodian, but as of 12/31 the check was “in the mail.” For RMD calculations, do I just forget these “in-the-mail dollars” (as they will be accounted for next year), or do I add the value of the outstanding check to the 12/31/2023 balance to calculate my 2024 RMD from my IRA with the new custodian? Thanks, Ryan Answer: Hi Ryan, The RMD rules do require you to adjust the 12-31 prior-year balance used to calculate RMDs for any outstanding rollovers or transfers. In your case, you would need to add the amount of the outstanding transfer into your 12-31-23 balance when calculating your 2024 RMD.

The get-out-of-jail card that has allowed many IRA and plan beneficiaries to forego annual required minimum distributions (RMDs) is about to expire.Here’s some background:

Question:For a non-spousal inherited roth IRA account, there seems to be contradictory advice on different websites about when to take distributions. Some say there are annual required minimum distributions (RMDs) within the 10 years; others say you can wait until the 10th year for a lump sum. If you can wait and don't need the money, wouldn't it be wiser to wait until the last year since the money compounds tax free and the final lump sum distribution would also be tax-free?