The Secure Act was signed into law on 12/20/19.  Some key points include:

  • Beginning in 2020 and beyond, removal of the 70 ½ contribution age limit to traditional IRA’s.  However, if you were age 70 ½ or older as of 12/31/19 you are restricted from making a 2019 contribution.
  • RMD (Required Minimum Distribution) on an IRA has been changed from age 70 ½ to 72 beginning in 2020. (NOTE: Does not apply if you were 70 ½ in 2019)
  • Elimination of the lifetime “stretch provision” on non-spouse beneficiaries of inherited IRA’s and other retirement accounts.  This is replaced by a 10-year distribution cap.  An exception is if the designated beneficiary is no more than 10 years younger than the deceased.

Included in the Cares Act signed into law 3/27/20

Required Minimum Distributions (RMDs) have been waived in 2020 for ALL participants in Retirement Accounts, EXCEPT Defined Benefit Plans.

This includes those who had not yet received their first distribution if they turned 70 ½ in 2019 and needed it by 4/1/20 – so 2019 & 2020 waived for them.

If already taken in 2020, they can pay it back to the plan or rolled over (Unless 60 days has already passed).  This includes beneficiaries as well.

As a result of this change, there is no benefit for making charitable contributions from your IRA this year.

If you are taking your RMD in monthly distributions, and you don’t need the money, you should consider turning it off for this year.

We are here for you, managing through these challenging times.  Please contact us with any questions or concerns.