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The SECURE ACT and You

December 18, 2019

By: Kurt Mortenson, CFP®


After being introduced earlier this year, Congress passed The SECURE ACT and is awaiting the President’s final approval. This legislation makes the biggest change to retirement since the Pension Protection Act in 2006. So, what does this mean for you? There are several changes, but we believe these are the most significant that could impact you. These changes could go into effect on January 1, 2020.

1.  The age for starting Required Minimum Distributions (RMDs) has been raised from age 70½ to age 72. If you will be at least age 70½ by the end of this year (born before July 2nd, 1949), unfortunately, the old rules still apply to you.

2.  There is no longer a maximum age for making contributions to an IRA. Previously, you could not make contributions once you turned age 70½.

3. The Stretch IRA is no longer an option. When a child or any non-spouse inherited an IRA, the RMDs were based on the life of the beneficiary who inherited the account, meaning they could “stretch” the account for a long time. Now, the account must be completely liquidated by the 10th year after the date of death. For those that already inherited an IRA from a non-spouse, you are still able to take the RMDs based on your life expectancy. The new 10-year rule would not apply to you.

If you have questions about how The SECURE ACT could specifically impact you, please contact us anytime at 760.834.7250.