Monthly Insights Newsletter – August 2023

Pat’s Planning Post

Guidance from the IRS Regarding RMDs For Inherited IRAs

For non-spouse beneficiaries who inherited IRAs after December 31, 2019 (post-Secure Act 1.0) and need to fully distribute an inherited account at the end of 10 years, there has been much ambiguity around when those distributions need to start. Do they start the first year the account is received? Or can a beneficiary wait until the last year (year 10) to fully distribute the account?

For tax years 2020 – 2022, the IRS provided annual guidance, which has provided flexibility to beneficiaries. No penalties were due for beneficiaries not taking distributions from inherited IRAs.

Last month, the IRS weighed in with updated guidance for 2023… and they have punted once again! Non-spouse beneficiaries will not be required to take distributions from inherited IRAs in 2023 and will not be penalized for it. The original 10-year timeline still applies, however.

Industry experts were hoping to get final guidance from the IRS this year on how these accounts should be handled moving forward; however, that clarity will hopefully come at a later date.

You can read the full IRS publication by clicking here.


Liebmans’ Library

For this month, we chose a Wall Street Journal article about the most significant, in our opinion, change in the markets over the last few years: the end of the Federal Reserve’s zero interest rate policy. Shifts in monetary policy impact debt markets, real estate, equity markets, global trade, and the broader economy. Our view is that many investors and industry participants are still waiting for a return to the zero-interest rate policy of the last decade and need to update their playbook. Read the full article on the Wall Street Journal. 


Libby’s Quips & Quotes

“We are continually faced by great opportunities brilliantly disguised as insoluble problems.” – Lee Iacocca, Automobile Executive