SECURE ACT to become law, what does that mean for you?

Hi Everyone!  We have been providing you updates throughout the year in regards to the SECURE ACT and possible retirement plan changes it may bring.  Well, it appears the Act will be passed before year-end!  Below are a few important changes impacting retirees and for an in depth update, please read the update from IRA Guru, Ed Slott, below.

1. The required minimum distribution starting age is raising to age 72.  For those of you already taking required minimum distributions, these distributions will continue.
2. The “stretch IRA” is being eliminated.  What this means for you is your beneficiaries will be required to withdraw the complete inherited IRA over a ten year period.  There are a few exceptions to this requirement, but most beneficiaries will have a ten year payout requirement.
3. Penalty free distributions are available for birth or adoption up to $5,000.
4. The qualified charitable distribution remains in place and this can be started when an IRA owner turns age 70.5.
5. There is no longer an age limit to make traditional IRA contributions.  Therefore, if you or your spouse has earned income you can add dollars to your traditional IRA regardless of age.

Two additional points:

1. The Required Minimum Distributions tables are being updated and will be in effect January 1, 2021.  These new tables will “lower” a client’s required minimum distribution.
2. I would encourage all clients to not name a trust as the beneficiary of your IRA.  This is even more relevant with the passage of the SECURE ACT.  A “conduit” trust designed to allow the stretch to continue is now gone.

I hope this helps and please let me know if you have questions about these big retirement law changes.

Hello SECURE ACT, Goodbye Stretch IRA

Article from Ed Slott and Company, LLC

With the clock ticking down on 2019, Congress is expected to enact a $1.4 trillion year-end spending bill to keep the government running. Tucked away inside this mammoth piece of legislation is the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The SECURE Act is set to become effect January 1, 2020.

This new law includes significant changes to retirement accounts, including… Click here to continue reading this article.

Congress Is Set To Pass the Secure Act. Here’s What It Will Mean for Your 401(k) and IRA.

Article from Barron’s

Congress looks set to pass the first major piece of retirement legislation in a decade this week. The vote is tied to the spending bill needed to keep the government open, which Congress is endeavoring to pass before leaving town for the holidays. That means a spate of changes for retirees related to their required minimum withdrawals, the way they use IRAs, and rethinking estate planning options. Click here to continue reading this article.

Copyright © 2019, Ed Slott and Company, LLC Reprinted from The Slott Report, December 18, 2019, with permission. Article URL. Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.