By William Striplin, Compliance Specialist with Vantage Retirement Plans
On December 20th, 2019, federal spending bill H.R.1994 passed through both houses and included the “Setting Every Community Up for Retirement Enhancement (SECURE)” Act. This act has a large impact on the retirement industry and could affect your retirement planning in the immediate future. Below is a small portion of the new legislation:
Required Minimum Distribution (RMD) Rule changing.
- Starting on January 1, 2020, the 70 ½ RMD rule is changing. The SECURE Act delays distributions to age 72 now, beginning with everyone born on July 1, 1949, or later.
Age Limit removed from Traditional IRA contributions.
- Individuals over 70 ½ will now be able to contribute to Traditional IRAs, in the same way, they are already able to contribute to Roth IRAs. The requirement to have earned income in that tax year to be eligible to contribute stands as is.
Changes to stretching IRAs for beneficiaries
- Whereas previously IRA beneficiaries were allowed to spread distributions over their own life expectancy, they will now only be able to spread distributions over a maximum of 10 years.
We encourage you to consult with your financial advisor to discuss how this legislation could impact your personal financial plan.
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