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2021 RMD Reminders from the City of Milwaukee Deferred Compensation Plan
The Setting Every Community Up for Retirement Enhancement (SECURE) Act was enacted into federal law on January 1, 2020 and included a number of retirement savings and employee benefit changes.
Among those changes was an increase in the age for required minimum distributions (“RMDs”) for plan participants in 401(a), 401(k), 403(b), and 457(b) plans and for traditional IRA owners if the individual had not already turned age 70 by June 30, 2019.
The new age at which retirees must begin taking RMDs generally is now age 72. Similarly, the new age for owners of traditional IRAs to begin taking RMDs is age 72. This will leave more time for individuals to reach their savings goals. If you turned age 70½ in 2019 or earlier, the new RMD starting age does not apply, even if distributions were deferred to April 1, 2020.
Note that the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) waived the obligation to take a RMD for the 2020 tax year and to take the RMD for the 2019 tax year if the individual had not yet taken that RMD in 2019 and would have been required to do so no later than April 1, 2020. For more information about the IRS contribution limits for 2021 or the RMD changes as a result of the SECURE Act, please call the Deferred Compensation Plan Information Line at 844-360-MDCP (6327).