IRS Issues Final SECURE Act Regulations: Controversial Annual RMD Requirement During 10-Year Rule Stands

By Sarah Brenner, JD
Director of Retirement Education

On July 18, 2024, the IRS issued final required minimum distribution (RMD) regulations under the 2020 SECURE Act. The newly issued regulations fine-tune existing rules for trust beneficiaries and aggregation of RMDs. They also eliminate burdensome rules for certain spouse beneficiaries and documentation requirements for certain IRA beneficiaries. However, the 260 pages of final regulations keep the majority of the 2022 proposed regulations intact, including one provision that has generated a lot of controversy. The IRS is standing firm and maintaining the requirement that some beneficiaries must take annual RMDs during the SECURE Act’s 10-year payout period.

IRS “Hypothetical RMD Rule” Prevents Surviving Spouses from Avoiding RMDs

Part 1: Inherited Roth IRA by Non-Spouse Beneficiary – 5-Year Clock Issues?

Part 2: Inherited Roth IRA by Non-Spouse Beneficiary – 5-Year Clock Issues?

How Are Annual RMDs in the 10-Year Period Calculated?

Rolling Over Your In-Plan Conversion? Watch Out for the Recapture Rule

IRS Gives Guidance on Penalty-Free Withdrawals for Financial Emergencies and for Victims of Domestic Abuse

Q: One of our clients wants to cash out his IRA and then roll it into a Roth IRA within 60 days. Can this be done directly, or does it have to be rolled back into an IRA first and then converted?

Answer

Q: Do required minimum distributions (RMDs) need to be taken when a non-spouse beneficiary inherits Roth IRA? It seems this has been a point of confusion for some time.

Answer

Q: I turn age 73 in October 2024. Do I have to wait until my birthday in October to take my required minimum distribution (RMD) for the year, or does any withdrawal I make in 2024 count towards the RMD?

Answer

Q: I inherited both a traditional and a Roth IRA from my significant other (non-spouse) who passed away in 2021. He had started taking required minimum distributions (RMDs). I am less than 10 years younger than he was. Question is: do I or do I not have to empty both accounts within 10 years of his death? No one is giving me an answer one way or another.

Answer

Have a question for America's IRA Experts?
Email your questions to us at [email protected]. Selected questions will be featured every Thursday in the Slott Report.

Yahoo! Finance: The best retirement account to open amid current tax rates

CNBC: ‘Taxes are on sale’: Why now is a great time to save in a Roth account, says CPA

ThinkAdvisor: Why a Lump Sum Beats an IRA Rollover for Some Clients

SAVE $500 with promo code EARLYBIRD

Promo code expires August 16, 2024

Join us at our upcoming Virtual 2-Day IRA Workshop in September for up-to-the-minute education. More than four years after the SECURE Act took effect upending many longstanding retirement rules, the IRS has finally released its long-anticipated final regulations providing new clarity on these complex tax rules—plus, proposed regulations for SECURE Act 2.0! These significant changes are crucial for all advisors to understand and discuss with clients now!

• The most-up-to-date IRA expertise, including new opportunities and planning considerations stemming from the SECURE Act, the SECURE Act 2.0 and new RMD regulations released July 2024
• An action plan to implement into your business immediately to protect your clients and prospects from avoidable (and costly) planning errors
• A 400+ page manual to take home and use as a practical reference guide
• Continuing education credits
• Built-in Q&A Time

1:00 P.M. ET Wednesday, August 21

The IRS has finally issued its comprehensive final regulations for the SECURE Act, alongside proposed regulations for SECURE Act 2.0. Understanding these significant RMD changes is essential for advisors to effectively guide their clients.

Join America’s IRA Expert, Ed Slott, CPA, and award-winning advisor, Dave Alison, CFP®, EA, BPC, for an engaging conversation that blends Ed’s unparalleled tax expertise with Dave’s practical, client-facing advisor experience with high-net-worth and ultra-high-net-worth clients. Benefit from this dynamic duo as they provide comprehensive tax insights and practical strategies. Together, they will distill nearly 300 pages of new regulations into actionable advice, offering a well-rounded perspective on the latest regulatory changes and how to apply them effectively.

Find an Ed Slott-Trained Advisor

Discussion Forum

Ask Ed Slott and Company to Speak

Financial Advisor Training

IRA Shopping Center

Update Email Preferences