INDUSTRY INSIGHT
IRA AND 401(k) CHANGES
SPONSORED CONTENT
New Rules for Your IRA and 401(k)
David Priore, CFP® Century Heritage Financial Advisors
The SECURE Act makes changes to IRA and
401(k) plans
Officially called the Setting Every Community Up for Retirement
Enhancement Act, the “SECURE Act” takes effect this year and could
have an impact on decisions you may want to make regarding your
retirement savings strategy. Following are some of the highlights of
the act.
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Century Heritage Financial Advisors
David Priore, CFP®
Financial Advisor, LPL Financial
700 Regis Ave.
Pi�sburgh, PA 15236
(412) 650-2600 x 1114 Office
(412) 650-3482 Fax
[email protected]
www.centuryheritagefa.com
Century Heritage
FINANCIAL ADVISORS
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For one, the SECURE Act increases the age when you must begin
to withdraw from retirement accounts. Under the old rules, owners of
Traditional IRA and 401(k) plans in most circumstances had to begin
taking distributions in the year that they turned age 70½. These
distributions are known as Required Minimum Distributions, or RMDs
for short. The SECURE Act changes the age at which you must begin
taking Required Minimum Distributions from 70½ to 72.
But, if you were age 70½ before January 1, 2020, you must continue
to take your required distributions.
Another change to IRA rules allows a person older than 72 to
continue making contributions to a Traditional IRA, under certain
circumstances. Under the old rules, the cutoff age for contributing
to an IRA was 70½. There is a caveat, though. In order to contribute
beyond age 72, you must still be working. Only those with income
from employment can contribute to an IRA.
Non-working spouses can contribute to an IRA beyond age 72, so
long as his or her spouse is still working.
The SECURE Act makes other changes to IRA and 401(k) plans,
including:
■ Distributions of up to $5,000 taken for the birth or adoption of
a child are exempt from the 10% early distribution penalty tax.
Both parents are eligible to take distributions from their
respective plans, meaning that a total of $10,000 could be taken
without penalty. Also, distributions can be paid back to the plan.
■ The SECURE Act imposes a 10-year distribution limit for most
non-spouse beneficiaries to spend down inherited IRAs and
401(k) plans. Before passage of the act, withdrawals from
inherited accounts could be stretched over the lifetime of
beneficiaries.
Please note that there are exceptions to the changes outlined
above. And the act affects retirement plans in other important ways.
If you would like more information on how the SECURE Act might
affect your retirement savings strategy, please contact Dave Priore at
412.650.2600, ext. 1114.
Securities offered through LPL Financial, member FINRA/SIPC. Insurance products
are offered through LPL or its licensed affiliates.
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