SECURE Act Changes are in Effect Now

Do You Know How the SECURE Act Affects You?

The SECURE Act, or the Setting Every Community Up for Retirement Enhancement Act went into effect January 1, 2020. 

New RMD Age

The 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. 

Inherited Retirement Account Distribution period

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. 

Adoption Provision

In a time when so many grandparents are adopting and raising their grandchildren, 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 both parents have individual accounts in each parents own name.

There are more changes which are technical and extensive.  Talk to your advisor, or visit www.investmentsstore.com to be connected to a licensed professional who can answer your questions today.