Secure or Not?

written by Conrad Slate

Do you remember when “we have to read it to see what is in it”?  Well, we have a brand new law that will make a difference to almost every American who has a retirement account of almost any kind.

The SECURE Act passed Congress and the president signed it into law.  The BIG thing that most people know about is the change in when RMDs must begin.  If you have not started taking RMDs as of 12/31/2019, then you may defer RMDs until the year you are 72.  That does not stop you from beginning sooner if you choose.  If you have started RMDs, sorry, but you do not change anything.

There is good news too.  If you are still working after age 70 and have earned income, you can contribute to a traditional IRA, something that has never been possible before.

Changes that are the “gotchas” come in several forms. 

Beneficial IRAs have new rules that will impact many people.   If you are the child of a deceased parent you may no longer be allowed to “stretch” the IRA payments over your lifetime.  It is likely that you will now have to take the payments out over no longer than 10 years which probably means higher taxes for you.

Planning is more important than ever before if you are to avoid many of the “gotchas”.  You cannot wait until the last minute.  You need to take action and make plans to assure that you have considered the options.

required minimum distribution (RMD) is the amount of money that must be withdrawn from a traditional, SEP, or SIMPLE IRA account by owners and qualified plan participants of retirement age. Participants must begin withdrawing from their retirement accounts by April 1 following the year they reach age 70 1/2