The CARES Act essentially suspended required minimum distributions (RMDs) for 2020 across the board. However, there have been a lot of questions about what this means for those who already took out distributions, and the impact on taxes and inherited accounts.
It is important to remember that the CARES Act is a relief bill, and by suspending 2020 RMDs, the government is giving up short-term tax revenue to provide relief to retirees. Additionally, markets have been very volatile, and suspending RMDs gives many Americans the ability to leave their investment portfolios alone to recover over the next year.
In addition to the relief these RMD provisions provide, it also opens up some planning opportunities.