No RMD in 2020

Many of my clients have Individual Retirement Accounts (IRAs) in America. These special accounts allow them to invest in stock, bonds, ETFs (exchange traded funds), bank deposits (CD’s), and more, and not have to pay U.S. tax on the earnings. 

When do I pay U.S. tax on my IRA? 

When people withdraw money from a regular IRA, that’s when they pay tax. For example, if you’ve got $100,000 in an IRA and it grows to $130,000, you won’t pay U.S. tax on that growth. But if you withdraw $10,000 from the account to pay for a vacation, you’ll have to pay tax, and possibly a penalty, too, on the amount that you take out. (This article is educational, not tax advice. Speak to a tax professional to understand your tax situation in America and in Israel.) 

Why not leave the money in the IRA and avoid tax? 

According to IRS rules, many people are required to withdraw money from their IRAs.  We call that an “RMD” (Required Minimum Distribution). If you must take out a certain amount of money from your IRA, then you’re probably familiar with the process. Your bank or brokerage firm tells you how much to take out and tax is withheld. 

The good news! No RMDs in 2020 

As part of the U.S. economic stimulus package, America is allowing people to skip their 2020 RMDs. Unless you need to use the money for covering your living expenses, meaning that you don’t have other pools of money you can use, you’re probably wise to leave the money in the IRA for this year.  

Make sure to tell your advisor if you want to cancel your RMD 

People commonly have their RMDs handled automatically so they don’t accidentally forget. That’s great, but if you want to cancel the RMD for this year, make sure you call your advisor. 

If you need any help handling your IRA, or if you feel your U.S. accounts are not properly invested, please give me a call, 02-624-2788, or send me an email, To learn more about new IRAs regulations, go to 

Douglas Goldstein, CFP®, is the director of Profile Investment Services, Ltd. He is a licensed financial professional both in the U.S. and Israel. Call (02) 624-2788 for a consultation on how to set up your American assets to meet your financial goals. Securities offered through Portfolio Resources Group, Inc. Member FINRA, SIPC, MSRB, FSI. The opinions expressed are those of the author and not those of Portfolio Resources Group, Inc. or its affiliates. Neither PRG nor its affiliates give tax or legal advice.

Published May 21, 2020.

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