April 15, 2020

If you or someone you know is retired and turned age 72 (or 70 ½ prior to January 1, 2020), you are typically required to take a Required Minimum Distribution (RMD) withdrawal from your tax-deferred retirement accounts including 401(k)s, 403(b)s, 457s, and IRAs.

Due to the Coronavirus Aid, Relief and Economic Security (CARES) Act, the RMD requirement for 2020 has been suspended. This means, you are not required to make a withdrawal this year and will not receive a penalty for skipping the withdrawal.

I have received many questions from clients about this so I thought I’d take a moment to share a few details to help you understand this change.

Why RMDs are suspended

The intention of removing the 2020 RMD requirement is to allow retirees the flexibility to either keep that money in their accounts so they can potentially recoup any losses they’ve experienced from this year’s market decline or to take the withdrawal, but only the amount they need to live on and no more.

If you already took the withdrawal

If you got an early start to the year and already took your RMD withdrawal for 2020, you may be able to re-contribute the distribution if the distribution was taken less than 60 days ago or if you can show financial hardship due to the Coronavirus pandemic. RMD withdrawals already taken for inherited IRAs are not eligible for re-contribution. 

If you have questions

As the financial advisor through CUSO Financial Services, L.P.* (CFS) at 1st United Credit Union, I am available to assist 1st United members. If you have any questions about RMDs or how the CARES Act impacts your retirement plans, please reach out. It will be my pleasure to answer any questions you may have. You may call me at (925) 598-4718 or send an email.

I look forward to your questions.

Brought to you by...

Rahil Machiwalla
CUSO Financial Services, L.P.*
Financial Advisor
(925) 598-4718
CA Insurance Number: 0G20361

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*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members. Please consult a qualified tax advisor for specific tax advice.