Here’s what changed:

  • The flexibility to roll over your RMD. Previously, there was a limited time frame to roll over RMDs that were waived under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. That meant some investors were left out. Those who took their 2020 RMDs before February 1 were unable to roll back those distributions. In addition, IRA beneficiaries weren’t included in the rollback options.

    On June 23, the IRS announced that all investors who already took RMDs in 2020 are now able to roll back distributions. The new deadline for rolling back such RMDs is August 31, 2020. That replaces the previous requirement of rolling them back within 60 days of the distribution, or by July 15 for certain distributions.

  • Flexible distributions from retirement plans. Under the CARES Act, investors affected by the coronavirus crisis may be able to take penalty-free distributions in 2020 from an IRA or employer-sponsored plan. That’s been expanded to include more scenarios.

Details on the RMD waiver

The CARES Act includes a temporary waiver for:

  • 2020 RMDs, including ones from IRAs, inherited IRAs, and employer-sponsored plans such as 401(k) plans.
  • 2019 RMDs due by April 1, 2020, for individuals who turned 70½ last year and didn’t take the RMD before January 1, 2020.

Here are some important details if you’re looking to stop your automatic RMDs or “roll back” an RMD you already took.

How to suspend your automatic RMD

If you’re scheduled to take your distribution automatically through our RMD Service, you can cancel any remaining distributions for 2020 at by following these steps. Note: Personal Advisor clients are unable to change their RMDs online and need to work with their advisor to take action.

  1. Log on to your account.
  2. From the menu, choose My Accounts and select Retirement contributions, distributions & RMDs.
  3. Under Retirement summary, choose Required minimum distribution (RMD).
  4. Depending on your account type, select either Change RMD service option or Delete.
  5. If you chose Change RMD service option, select the Calculation only method on the next page. Or if you chose Delete, just choose Submit on the next page.
  6. Reactivate your RMD in 2021.

Important consideration for 2021: If you cancel an automatic distribution this year, you’ll have to reactivate it in 2021 to help ensure you take your full RMD for next year. Reactivating your RMD for next year will ensure you’re not subject to the usual 50% penalty that applies to any RMD amount that’s not distributed. If you’d like to cancel your RMDs this year but automatically restart them in 2021, call us at 877-662-7447 Monday through Friday from 8 a.m. to 8 p.m., Eastern time. We’d be happy to help you or answer any questions you may have.

Rolling back an RMD

If you’ve already taken RMDs in 2020, you may be able to roll them back to an IRA or employer-sponsored plan (if the plan permits).

For RMDs taken from an IRA in 2020, the IRS replaced the 60-day rollover deadline with an August 31, 2020 deadline.

In addition, the IRS is giving investors more flexibility if they took an RMD in 2020:

  • If you took an RMD from an inherited IRA in 2020, you can roll it back into the same inherited IRA by August 31, 2020.
  • If you took an RMD in 2020 and roll it over, you won’t be subject to the 1-rollover-per-365-days rule. You can find more information about rollover rules at

If you’d like to roll back an RMD to an IRA, follow these steps. Step 2 includes instructions to specify if this is a rollover. If you’d like to roll back an RMD from an inherited IRA, please call us at 877-662-7447 Monday through Friday from 8 a.m. to 8 p.m., Eastern time.

Flexible distribution from retirement accounts

Under the CARES Act, investors affected by the coronavirus may be able to distribute up to $100,000 from an IRA or employer-sponsored plan in 2020.* These distributions won’t be subject to the normal 10% early withdrawal penalty.

Additionally, the income tax due on those distributions can be spread over 3 years, and investors have the option to return some or all of the funds to an IRA or another retirement plan within 3 years. These rollovers won’t be subject to the 1-rollover-per-365-days rule.

The IRS recently expanded the eligibility criteria. You may be eligible to take a distribution if:

  • You, your spouse, or your dependent is diagnosed with COVID-19.
  • You, your spouse, or member of your household experience adverse financial consequences due to COVID-19 as a result of furlough, layoff, reduction in work hours, inability to work due to lack of child care, closing/reduced hours of the business you own or operate, having pay or self-employment income reduced, or having a job offer rescinded or start date for a job delayed.

Roth IRA conversions and distributions

In addition to the above CARES Act provisions, you may be considering a Roth IRA conversion to take advantage of lower income and lower taxes in 2020. While current market volatility makes it nearly impossible to know the best time to convert, doing so when your retirement account values are down may lessen the tax impact of the conversion.  

Since the CARES Act allows you to skip RMDs for 2020, you can convert assets from a traditional IRA to a Roth IRA this year without first satisfying the typically required RMD. See this article for more details and considerations to find out if a Roth conversion makes sense for you. Keep in mind that converted assets can’t be reversed or recharacterized at a later time.

If you already have a Roth IRA and need access to the funds, you can withdraw contributions anytime without paying taxes since the contributions were made on an after-tax basis. This is a standard benefit of the Roth IRA and not an added relief option associated with the CARES Act.

We’re here to help you every step of the way. If you’re a Personal Advisor client and would like to discuss your options, please log on to your Vanguard account and schedule an appointment.

*The $100,000 maximum is an aggregate amount per investor, against all retirement accounts.


All investing is subject to risk, including the possible loss of the money you invest.

We recommend that you consult a tax or financial advisor about your individual situation.

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