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The eligible maximum loan limits have increased from $50,000 or 50% of vested account balances to $100,000 or all of the vested account balance. Collateralized loan limits will be lower. Your plan must allow loans, and you must meet a coronavirus-related eligibility requirement to take this type of loan. Any coronavirus-related loans must be initiated between March 27 and September 23, 2020.
Not all retirement plans permit loans. Additionally, your plan has the option to limit the number of loans or the amount you may borrow, and any such restrictions are not affected by the CARES Act.
If you will be repaying an existing retirement plan loan as of the CARES Act effective date of March 27, 2020, through December 31, 2020, you may elect to suspend payments for up to one year.
When you request a coronavirus-related distribution (also referred to as a withdrawal), you will be asked to self-certify (or attest) that you meet an eligibility requirement.
Log in to your account . Under My Account, look for the Other Accounts section. Then select Life Insurance to get started.
Please note: If your insurance is owned by a trust, you cannot view your policy online. Call 800-223-1200 for information.
You generally have three options for your RMD withdrawal:
- You can receive the money in your bank account electronically. (Preferred)
- We can mail a check to your address.
- You can withdraw the money and put it toward after-tax accounts. After-tax accounts include brokerage accounts, mutual fund accounts, after-tax annuities and college savings funds.
You can review your required minimum distributions by logging in to your account from the My Account tab. If your plan allows it, you can withdraw money online. If an online withdrawal is not an option, call us at 800-842-2252. Please be sure to contact us two to three months before you must receive your withdrawal to ensure you receive funds by the required deadline.
Any withdrawal paid to you will count toward the RMD for the tax-deferred retirement account. In certain situations, you may elect to take your full RMD amount from one or more traditional IRAs instead of separately from each of your traditional IRAs. This is called aggregation, and the IRS also permits it for 403(b) plans. For a 403(b) retirement plan, the RMD is calculated separately but may be withdrawn from any of your 403(b) plan accounts. The same rule applies to your traditional IRAs. Money withdrawn from a traditional IRA will not count toward your 403(b) plan RMD and vice versa. Money withdrawn from other types of retirement accounts will only count toward the RMD for that tax-deferred retirement account, and no amounts withdrawn from elsewhere will count toward that plan's RMD. If you are not sure whether the withdrawal you received is enough to cover your RMD requirement, call us at 800-842-2252.
Your employer's retirement plan rules will determine how many loans you can have at one time. From a repayment standpoint, you should note that payments from multiple loans may be greater than payments from one loan.
A rollover or transfer increases the balance in the accumulation annuity to which it is applied and may result in a larger calculated RMD for that contract when you reach RMD age. However, a rollover or transfer between plans from your TPA contract or fixed period annuity is not allowed on or after January 1 of the year in which you turn age 72. After that date, except for internal transfers within the same plan (which reduce the balance in one investment and increase the balance in another one, leaving the overall plan investment unchanged), TPA and fixed period annuity payments must be taken in cash. However, only in the calendar year in which payments begin, TPA or fixed period annuity payments apply toward your calculated RMD for the accumulation contract (or any other RMD that may be satisfied using the aggregation rule). In later years, TPA payments, like other fixed annuity payments, satisfy the RMD for the amount settled into that contract. The RMD exactly equals the payment amounts. Nothing is left over that can be treated as an RMD under another plan or contract under the aggregation rule.
If you have any questions or want to learn about other ways to satisfy the IRS required minimum distribution rules from your TPA, please call us at 800-842-2252. We're here on weekdays from 8 a.m. to 10 p.m. (ET).
To help provide relief for individuals required to take RMDs, the CARES Act has waived the requirement and allows you to cancel your 2020 RMD payments and restart them in 2021.
You're required to start taking an annual distributions from traditional IRAs no later than April 1 of the year following the year you turn 72, regardless of employment status (e.g., if you turn age 72 in 2021, you must begin taking distributions by April 1, 2022).
Minimum distribution rules don't apply to ROTH IRAs during the owner's lifetime, though they may apply to the beneficiary that inherits the ROTH IRA. Note: this exception to taking lifetime RMDs does not apply to Roth-source amounts in a retirement plan. Designated Roth accounts are subject to RMD in the same manner as accounts funded by before-tax contributions.
Generally, yes. Beneficiaries may be required to take an annual RMD. However, the RMD rules for beneficiaries have recently been substantially changed to require most non-spousal beneficiaries to receive the balance of their inherited accounts by the end of the tenth year following the account holder’s death. Beneficiaries should consult a tax professional to determine if and when RMDs are required. You can call TIAA at 800-842-2252 for more information.
For your current employer's plan: If the plan allows, you may be permitted to delay taking RMD from your current employer's plan until April 1 after the year you retire.
For other tax-deferred retirement accounts and IRAs (other than Roth): You're required to withdraw a certain amount each year regardless of your employment status. It can get complicated, so we suggest discussing the specifics of your situation with your tax advisor. We can help answer any questions about TIAA retirement accounts from prior employers by calling 800-842-2252.
In this situation, you have the option to repay it back into a plan that accepts rollovers or into an IRA. Please note that this only applies to RMDs made in 2020 and rolled over by August 31.
The amount is based on your account balance at the end of the previous year and, generally, the life expectancy factor provided by the IRS in the Uniform Lifetime Table. Your RMD will change every year based on those two numbers. Please note: If you're participating in a 403(b) retirement plan, any contributions and earnings credited before 1987 are not subject to RMDs until the year you turn age 75. Keep in mind that any withdrawals you take before you are subject to the minimum distribution requirements, or withdrawals for more than the required amounts, will reduce your pre-1987 balance first.
You can call TIAA at 800-842-2252 for more information about the amount you need to take this year.
Existing loan payments may be suspended through the end of the 2020 calendar year. Payments will begin again in January 2021. Go to Ongoing Transactions and click on view/modify to suspend your loan. If you have multiple loans, you will have to take these steps for each repayment you wish to suspend.
A required minimum distribution (RMD) is the minimum amount you must withdraw from your retirement account(s) to satisfy federal tax rules. Generally, you are required to start taking withdrawals from certain tax-deferred retirement accounts (including traditional IRAs) when you reach age 72.
You may take up to an aggregate of $100,000 in coronavirus-related withdrawals from eligible retirement plan accounts and IRAs. The distribution is available through 1 p.m. EST on December 24, 2020.
Depending on your employer's plan rules, you may be allowed to continue making payments after you leave your job or may be required to repay the outstanding loan in a lump sum.
RMDs are not required for 2020, and may not be requested per the CARES Act legislation, however, you may be able to take a cash withdrawal per your plan's rules.
If you don't take the amount required, the IRS could assess an excise tax on the amount not withdrawn.
If you are concerned that you may have missed an RMD, please contact your tax advisor.
If you turned 70½ or retired this year: You can take your first withdrawal from employer-sponsored plans before April 1 of next year.
If you wait until the next year to take your first withdrawal, you’ll need to take a second withdrawal at some point in the same year. That could increase your tax liability next year.
When evaluating your required minimum distribution strategy, you may want to consider lifetime income options that provide you with guaranteed income that cannot be outlived. Keep in mind if you have been a long-term contributor to TIAA Traditional, you may receive additional amounts of income by creating a stream of guaranteed income.
In some cases, creating a guaranteed income stream may provide higher amounts of income in retirement while satisfying your required minimum distribution requirements. Our retirement specialists are available to discuss our range of flexible income options and choices. For additional information, please call us at 800-842-2252, weekdays, 8 a.m. to 10 p.m. (ET). Any guarantees under annuities issued by TIAA are subject to TIAA's claims-paying ability.
Please note that full or partial annuitization will NOT reduce the calculated amount of your required minimum distribution (which is determined as of the prior December 31 and cannot be changed) for the year of annuitization. Annuity payments made in that first year will count toward satisfying the calculated RMD amount. Amounts applied to produce annuity income will no longer be part of the contract accumulation and will not factor into the RMD calculation for subsequent years. Instead, amounts applied to annuity income are "walled off" in their own RMD bucket. Annuity payments received in years after the year of annuitization will exactly satisfy the RMD with respect to the payout annuity. Such payments will not count toward satisfying the calculated RMD for any plan or contract.
The act also allows you to recontribute within three years regardless of that year's contribution limit. This will make it easier for you to replace the amount of your distribution in your retirement account.
For example, you take a $22,000 distribution under the CARES Act in 2020. In 2022, you have enough money to recontribute the entire $22,000 to your account, and the annual contribution limit for 2022 is $20,000. That year, you can contribute the entire $22,000 to your account.
Not all accounts may be eligible for coronavirus-related distributions or advances. Contact TIAA for further information.
You generally have to take a distribution each year from employer-sponsored plans, including 401(k), 403(b), 457(b) and other defined contribution plans, when you turn 72 or retire, whichever is later (plan permitting). If you turned age 70½ before January 1, 2020, then your RMD age is 70½, not 72. If you turn age 72 or retire (and you’re already age 72 or over, or were age 70½ or older on December 31, 2019) in the first year for which you are required to take RMD, you have two choices: You can take your first withdrawal (the amount required for the first year) in that year (e.g., 2021); or, you can wait and take it in the next year (2022), as long as it is paid by April 1. However, if you wait until the next year to take your first withdrawal, you’ll have to take two withdrawals in that year—one for the amount required in the first year (2021) and one for the next year (2022)—which may increase your tax liability.
If you turned age 72 or retired during a previous year, you need to take your minimum distribution by December 31st of each year.
Please review the following tax and penalty information to help you determine if you should take a coronavirus-related withdrawal:
- The 10% early withdrawal penalty is waived.
- There is no 20% mandatory federal tax withholding required at the time of distribution.
- Withdrawals will be taxed based on whether you originally contributed money to your account before or after paying taxes on it. With a pretax account, your contributions, any employer match and earnings are taxable. For after-tax accounts, you already paid taxes on contributions, so only earnings are taxable.
- You can spread your tax obligation over three (3) years unless you elect immediate taxation. We suggest you consult with your personal tax advisor.