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Key Provisions of the SECURE Act

Key Provisions of the SECURE Act

| January 13, 2020
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On December 20, 2019 congress passed new legislation, the SECURE Act, which will impact retirement savings and strategies.

Here are a few of the major changes you may find of interest regarding retirement accounts. 

Post-70½ IRA Contributions – The prohibition on making
deductible contributions to a traditional IRA after age 70½
is repealed.

Plan Withdrawals for Birth or Adoption – The SECURE
Act allows an exception to the 10 percent penalty for birth
or adoption. New parents can now withdraw up to $5,000
from a retirement account within a year of a child’s birth
or adoption without the 10 percent penalty those younger
than 591/2 would normally owe. The distribution, which is
still subject to tax, can be repaid to a retirement account.

Increased Required Beginning Date – The SECURE
Act increases the age triggering the required
beginning date for plans and IRAs to 72.

“Stretch” RMD – The SECURE Act imposes a 10-year
distribution limit for most non-spouse beneficiaries to
spend down inherited IRAs and defined-contribution
plans. Before passage of the Act, withdrawals
from inherited accounts could be stretched over
the life of beneficiaries to mitigate taxes.

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