SECURE Act 2020 changes to IRAs

The Secure Act, or the Setting Every Community Up for Retirement Enhancement Act went into effect January 1, 2020.  The Secure Act changed the Required Minimum Distribution (RMD) age from 70 ½ to 72 years of age.  If you were born prior to July 1, 1949 you will still need to take your 2019 RMD by April 1, 2020.  If you already began taking your RMD, you must continue to take these RMDs. For those who have not yet begun the RMD, or those born on or after July 1, 1949, you will need to start withdrawing money from IRAs, 4019k)s, 403(b)s and 457s at 72 years of age.

You can also contribute to your traditional IRA after the age of 70 ½ if you have earned income, if you have not yet reach 72 years of age.

Inherited Retirement Accounts: Distributions to a non-spouse individual beneficiary must be made within 10 years from the death of the account owner.  The benefits or RMDs may no longer be “stretched” over the beneficiaries’ lifetime. 

In a time when so many older couples are adopting and raising children, this next provision may be even more important.  Secure Act allows penalty-free withdrawals from retirement plans for birth or adoption expenses.  This is limited up to $5,000 per parent, as long as they each have their own separate accounts in their own names.

There are more aspects to the new law, and it is a good time to talk to your financial planner to know how the law affects you.  If you need help, visit www.investmentsstore.com to be connected to a registered investment advisor who can answer your questions and guide you through the regulatory changes.