CRPC Required Minimum Distributions and Beneficiary Planning 1

Question 1

Under SECURE 2.0, what is the required minimum distribution starting age for an individual born in 1955?

Accepted Answer

Age 73

Answer

Under SECURE 2.0, individuals born between 1951 and 1959 must begin RMDs at age 73, while those born in 1960 or later must begin at age 75.

Question 2

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

Accepted Answer

25% of the shortfall, reducible to 10% if corrected timely

Answer

SECURE 2.0 reduced the RMD penalty from 50% to 25% of the shortfall, further reducible to 10% if corrected within the IRS correction window.

Question 3

How is a traditional IRA's required minimum distribution calculated each year?

Accepted Answer

Prior year-end balance divided by the applicable life expectancy factor

Answer

RMDs are calculated by dividing the account's December 31 prior-year balance by the applicable IRS life expectancy factor from the relevant table.

Question 4

Which retirement account type is NOT subject to required minimum distributions during the original owner's lifetime?

Accepted Answer

Roth IRA

Answer

Roth IRAs are not subject to RMDs during the original owner's lifetime, making them a powerful tool for legacy planning and tax-free wealth transfer.

Question 5

Which IRS life expectancy table do most IRA owners use when calculating their RMDs?

Accepted Answer

Uniform Lifetime Table

Answer

The Uniform Lifetime Table is used by most IRA owners for RMD calculations, regardless of whether a beneficiary has been named, unless the sole beneficiary is a spouse more than 10 years younger.

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC - Chartered Retirement Planning Counselor Practice Test

CRPC Required Minimum Distributions and Beneficiary Planning 1