CEA Retirement Planning & IRA Estate Strategies

Question 1

Under the SECURE Act 2.0 (effective 2023), at what age must required minimum distributions (RMDs) begin for individuals born between 1951 and 1959?

Accepted Answer

73

Answer

SECURE Act 2.0 increased the RMD starting age to 73 for individuals born between 1951 and 1959, and to 75 for those born in 1960 or later.

Question 2

Which type of IRA provides tax-free qualified distributions in retirement and can pass income-tax-free to heirs?

Accepted Answer

Roth IRA

Answer

Roth IRAs are funded with after-tax contributions, and qualified distributions—including to beneficiaries—are completely income-tax-free.

Question 3

Under the SECURE Act (2019), most non-spouse beneficiaries who inherit an IRA must distribute all funds within how many years of the owner's death?

Accepted Answer

10 years

Answer

The SECURE Act eliminated the 'stretch IRA' for most non-spouse beneficiaries, requiring full distribution within 10 years of the original owner's death.

Question 4

Which group qualifies as Eligible Designated Beneficiaries (EDBs) under the SECURE Act, allowing them to stretch IRA distributions over their lifetime?

Accepted Answer

Surviving spouses, minor children, and disabled individuals

Answer

EDBs include surviving spouses, minor children of the owner (until age of majority), disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the owner.

Question 5

What is the excise tax penalty under SECURE Act 2.0 for failing to take a required minimum distribution (RMD)?

Accepted Answer

25% of the amount not distributed

Answer

SECURE Act 2.0 reduced the RMD failure penalty from 50% to 25% of the amount that should have been distributed, and further to 10% if corrected within a timely correction window.

(CEA) Certified Estate Advisor Practice Test

(CEA) Certified Estate Advisor Practice Test

CEA Retirement Planning & IRA Estate Strategies