Congress attached the SECURE Act to the spending bill and it was signed into law on December 20, 2019.
Below are some important features that will affect IRAs, beginning January 1, 2020:
· Required Minimum Distributions (RMD) will now begin at age 72 vs. 70 ½; for those who turned 70 ½ in 2019, you are still grandfathered under the old rules and must continue to take your RMDs even if you’re under 72.
· Even though RMDs don’t begin until age 72, Qualified Charitable Distributions (QCD) can still be made once an IRA owner has reached age 70 ½.
· Biggest change relates to the elimination of the “stretch IRA”; now, non-spouse beneficiaries must withdraw the entire IRA and ROTH IRA within 10 years of inheritance. Certain exceptions apply.
· Existing inherited IRAs will still be grandfathered and can be “stretched” out over the beneficiary’s lifetime.
These new rules could create a significant negative tax impact to beneficiaries if not adequately planned for. We will have some upcoming conference calls to discuss this in further detail:
· January 16 at 2pm EST and 5pm EST
· January 29 at 8am EST, 2pm EST and 5pm EST
Upcoming workshops/seminars are also in the planning stages for February.