SECURE Act Impacts RMD Ages and Inherited IRAs
The SECURE Act was passed by Congress and signed into law on 12/20/19. The Act goes into effect 1/1/20, as part of a federal government spending package.
"SECURE" stands for "Setting Every Community Up for Retirement Enhancement." The Act is intended to strengthen retirement security.
Inherited IRA "Stretch" Changes
The Act revises Inherited IRA requirements if the beneficiary is not an "eligible designated beneficiary." More details to come.
PLEASE NOTE: EquiTrust will temporarily suspend Inherited IRA sales for deaths that occur 1/1/20 or later. Additional information will be provided as soon as possible.
RMDs Pushed to Age 72
A key provision which may impact your clients is a change in the age at which required minimum distributions (RMDs) must begin from IRAs and qualified plans. Currently, required minimum distributions must begin in the year they turn 70½; the SECURE Act increases that age to 72. Keep in mind that individuals who turned 70½ in 2019 are subject to RMD requirements for the current year. However, individuals who turn 70½ in 2020 or later are not subject to RMDs until age 72, with withdrawals taken no later than April 1 of the following year.
Contributions Beyond Age 70½
The bill also eliminates the maximum age for traditional IRA contributions, which was previously capped at age 70½.
More Details to Come
With the short notice between 12/20 passage and the 1/1/20 effective date, we're gathering additional information and analyzing the impact on your customers. More information will be distributed as it comes available to us.