2022 RMDs and and the Required Beginning Date: Today’s Slott Report Mailbag

Thursday, June 02, 2022

By Andy Ives, CFP®, AIF®
IRA Analyst
Follow Us on Twitter: @theslottreport

Question:

As we did 2 years ago, will we be able to skip taking a 2022 required minimum distribution (RMD) without penalties?

Answer:

Sorry, but RMDs are in full effect for 2022. The CARES Act waived RMDs in 2020, but that was a one-time deal. RMDs were back in play for 2021, and are still required for 2022 as well.

Question:

Good afternoon! I really enjoy the content and clarification around IRAs and the tax code. Makes my job a little easier! I did have a question about the 10-year rule and RMDs after the Required Beginning Date (RBD). If a beneficiary inherits the IRA from the decedent, how is the RMD on the inherited IRA calculated? Is it based on the age of the deceased or the age of the beneficiary? Is it a simple 10% per year? Does the beneficiary take normal inherited RMDs in years 1-9 and then distribute the remaining balance in year 10? Any help would be appreciated because I am in this exact scenario. Thanks!

Answer:

Glad we can be of help! If a beneficiary is subject to the 10-year rule, RMDs will only apply in years 1-9 if the original IRA owner died on or after his required beginning date. (The RBD is April 1 of the year after a person turns 72.) If that is the case, the RMDs are calculated using the single life expectancy of the beneficiary. This factor is then reduced by 1 for the following years 2 – 9. Think of the RMDs in years 1 – 9 as if the beneficiary was getting a normal lifetime stretch. However, by the end of year 10, the entire account must be emptied.  

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