Retirement Savings Strategies Get A Tune Up
The Setting Every Community Up for Retirement Enhancement ( SECURE ) Act was signed into law on Dec . 20 , 2019 . Because this law covers a lot of ground , we ’ re presenting it as a two-part series where we will primarily focus on the provisions that , we believe , are most important for you to know . For additional SECURE Act insight , check out our resource center at www . reacpa . com / SECURE-Act .
SECURE Act Makes Changes to IRA Rules
Considered to be the most substantial update to the laws governing retirement accounts since the 2006 Pension Protection Act , the SECURE Act takes aim at the way we , as a society , save for retirement and attempts to open retirement plans up to more people than ever before . While there are a lot of different aspects associated with this legislation , this article takes a closer look at the changes the SECURE Act makes to the Individual Retirement Account ( IRA ) rules .
An Age Increase For Required Minimum Distributions ( RMDs ) Effective Date : Distributions made after Dec . 31 , 2019 , for individuals who reach age 72 after such date .
Before the SECURE Act went into effect , retirement plan participants were generally required to begin taking minimum distributions from their IRA or retirement plan at age 70½ . This was to ensure that individuals would actually spend their retirement dollars over the course of their golden years instead of holding on to their nest egg for estate planning purposes . This practice may have made sense in the early 1960s , but knowing that today ’ s average life expectancy is longer now , the SECURE Act increases the RMD age to 72 .
If you turned 70½ in 2019 or earlier , your RMDs will not be delayed . Instead , you must continue to take your RMDs according to the guidelines that were set up before the SECURE Act went into effect .
Also , despite the delay in the RMD starting age , note that Qualified Charitable Distributions from IRAs will not be continued
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