Internal Revenue Service (IRS) Releases Proposed Minimum Distribution Rules – Retirement, superannuation and pensions


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The Internal Revenue Service (IRS) recently released highly anticipated rule proposals that clarify and revise some of the required minimum distribution (RMD) rules for qualified plans (that is to say 401ks, 403bs, etc.) and Individual Retirement Accounts (IRA). Although the proposed regulations are subject to further action in late spring 2022, they contain a few significant potential changes for joint and non-spouse beneficiaries.

Many of the proposed distribution rules depend, in part, on whether the account holder died before or after the applicable required start date for distributions. Under the SECURE law, this age has been raised to 72 years.

The following describes a few of the many rules offered by the IRS:

Joint beneficiaries

If the deceased owner’s spouse is the sole designated beneficiary and elects not to roll over the distribution, the surviving spouse may take the required minimum distributions over the deceased owner’s life expectancy. If the owner is deceased before the Holder’s Required Start Date and the Spouse is the Holder’s sole beneficiary, the Spouse may defer distributions until the end of the calendar year in which the Holder would have reached age 72.

If the owner had already reached the age of 72, annual distributions are required for all subsequent years; and, the surviving spouse can take distributions over the longer of the “remaining life expectancy” of the spouse or owner.

Minor children as beneficiaries

The age of majority is now set at 21; some commentators had previously speculated that this age could be as high as 26. If the beneficiary is a minor child, annual distributions are required based on the life expectancy of the minor child. Annual distributions continue after the minor child turns 21, and the account must be fully distributed within ten years of the minor child turning 21.

Adult children as beneficiaries (who are not disabled or chronically ill)

For many account holders, death occurs after their required start date. In these circumstances, a beneficiary who is an adult child must continue to take annual distributions from the account based on the life expectancy of the child. Additionally, the account must be fully distributed within 10 years of the death of the account holder.

Special rules for Roth IRAs

There are still no minimum distributions from a Roth IRA as long as the account owner is alive. Following the death of a Roth IRA owner, the required minimum distribution rules apply to the Roth IRA as if the Roth IRA owner had died before the applicable required start date. If the sole beneficiary is the Roth IRA owner’s surviving spouse, then the surviving spouse can delay distributions until the Roth IRA owner has reached their required start date.


The above are just a few of the many rules proposed by the Internal Revenue Service regarding the distribution of qualified retirement accounts and IRAs. Please keep in mind that the rules are currently undergoing comment and revision by the IRS.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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