Can I skip my annuity payment in 2020 because of the CARES Act?


Q. Does the CARES Act allow a non-spouse beneficiary of a non-qualified annuity taking life expectancy payments (RMDs) to skip the payment for 2020?
— Beneficiary

A. The CARES Act, passed in the wake of the coronavirus, opened up some new options for those with certain kinds of retirement accounts.

It waived Required Minimum Distributions (RMDs) from qualified plans and IRAs for 2020, said Altair Gobo, a certified financial planner with U.S. Financial Services in Fairfield.

The waiver also includes 2019 RMDs that were required to be taken before April 1, 2020, he said.

Gobo said the waiver applies to both owners and beneficiaries of qualified plans and IRAs, but it does not apply to the annual life expectancy-based payments beneficiaries must take from inherited non-qualified annuities.

“Non-qualified annuities are not subject to RMDs per Section 401(a)(9), and therefore, the CARES Act does not affect annuity distributions which are determined by state law and/or the insurance company,” Gobo said.

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This story was originally published on Aug. 27, 2020. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.