Article Posted on 01/03/2020
SECURE Act passed as part of spending bill on December 19, 2019 is making some significant changes in retirement savings.
The bill increased the age which you must pull funds from certain retirement accounts known as a RMD to 72 up from 70 1/2. Applies after 12.31.19.
SECURE Act also adds a penalty-free distribution option from qualified retirement plans for births and adoptions up to $5,000. Income tax would still be due, however, the penalty that is 10% on top of income tax is waived for an early distribution.
Eliminates what is known as the "stretch IRA". Beneficiaries of an inherited IRA now have 10 years to withdraw the funds.
Eliminates the age cap on making contributions to a traditional IRA. Before if you were over 70 1/2 you could not contribute to a traditional IRA.