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In December, Congress passed significant changes to employer retirement plans and individual savings with the SECURE Act. The law is part of the massive government spending bill that was approved by Congress on December 19 and signed into law by President Trump on December 20, 2019. The SECURE Act stands for the "Setting Every Community Up for Retirement Enhancement" Act with its primary intentions being to enhance the retirement planning opportunities and the grim retirement outlook for many working Americans. This bill enacts the biggest changes to the U.S. retirement system since 2006. In this Money Hacks episode, I talk about several of the changes you’ll need to know.
What Does This Mean for You? (the short version)
- New RMD age requirement: If you turned 70½ this year, you will need to take your RMDs per the old law, prior to April 1 of next year and every year thereafter. If you will turn 70½ in 2020, you will not need to begin taking your RMDs until 2022.
- New IRA contribution limits: If you are over age 70½ and still earning income, it may make sense for you to leverage this provision and contribute to an IRA. This will be on a case-by-case basis.
- Inherited IRA changes: If your estate plan involves leaving retirement accounts to your heirs, changes to this plan may be prudent on a case-by-case basis.
Any money questions you’d like answered? Our Money Hacks series is created from conversations we have with employees, investors, savers, and all people planning for their financial futures. What topics are on your mind for our next episode? Email us here!