New IRS Beneficiary Distribution Rules For Solo 401k and IRAs Effective for 2022 & Later Years REG-105954-20 & SECURE Act

Last month (February 2022), the IRS finally published (see REG-105954-20) updated beneficiary distribution rules (the distribution rules for those who inherit IRAs, an d 401k plan funds including solo 401k). These rules replace the rules last published in 2002 and also encompass many of the provisions found in the SECURE Act of 2019 which then became effective January 2, 2020.

The Main New Beneficiary Distribution Provisions Found in the New Rules

  1. The state’s child age-of-majority rule does not apply. Instead, the new IRS regulations age of majority which is age 21 and his or her 21st birthday applies. 

ILLUSTRATION: 

Jane is 13 in 2021 and inherited a solo 401k from her mother. Jane can delay taking beneficiary distributions until she reaches age 21 in 2029. Starting in 2029, Jane will be required to commence making distributions for the next 10 years. This is known as the 10 year beneficiary distribution rule.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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