Required Minimum Distributions Update

The CARES Act provision suspended 2020 required minimum distributions for all defined contribution plans and IRAs.

If you are among the millions of Americans required to take annual withdrawals from your defined contribution retirement plan or IRA, there are important changes you should know about.

When the Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020, it suspended required minimum distributions (RMDs) from defined contribution plans like 401(k) and 403(b) plans, and IRAs in 2020 to taxpayers who would have been otherwise required to take RMDs. As a result, individuals do not have to withdraw their retirement savings this year.

Who is affected by the suspension?
The option to suspend RMDs applies if you just turned 72 or if you were 70½ in 2019 and didn't take your first-year RMD. So, instead of having to take money out this year, the investments in your account would have the potential to continue growing. And in cases where a beneficiary is receiving distributions over a five-year period, he or she can waive the distribution for 2020.

Keep in mind that although you are not required to take RMDs from either a retirement plan or an IRA in 2020, you can choose to do so.

RMDs under regular circumstances.
In the absence of the CARES Act, the IRS typically requires that you begin taking annual withdrawals from your defined contribution retirement plan if you're age 72 or older and retired as of this year. If you turned age 70½ before January 1, 2020, however, your RMDs could have begun at 70½. The exception to this is if you are a 5% owner of the business sponsoring the plan, in which case your RMDs will begin even if you are still working.

In general, RMDs from traditional IRAs, including SEP and SIMPLE plans, must be taken by April 1 of the calendar year after you turn 72.

The RMD impact on a Roth IRA.
There is none, as you are never required to take distributions if you are a beneficiary of a Roth IRA account.
We're here to help.
Please call your local Mutual of America representative for complete information on RMDs, including your required RMD amount and how to take withdrawals automatically through the Automatic Minimum Distribution Option.

You should consider the investment objectives, risks, and charges and expenses of the variable annuity contract and the underlying investment funds carefully before investing. This and other information is contained in the contract prospectus or brochure and underlying funds prospectuses and summary prospectuses, which can be obtained by calling 1-800-468-3785 or visiting Read them carefully before investing.

Mutual of America's group and individual retirement products are variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment options you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should consider a variable annuity contract's other features before making a decision.

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