posted on February 17th 2020 in Market Commentary with 0 Comments /

The SECURE (Setting Every Community Up for Retirement Enhancement) Act became law during the last few weeks of 2019 and became effective on January 1. This measure, which affects anyone who has an IRA, includes the following significant changes:

RMDs will begin at age 72, instead of 70½  — Required minimum distributions (RMDs) must be taken from IRA accounts (excluding Roth IRA accounts) every year once account holders reach a certain age. That age has traditionally been 70½, but now it has been bumped to 72, allowing investors to continue tax-deferred growth longer. If you turned 70½ in 2019, you must still take your 2019 RMD as well as another one in 2020. But, if you turn 70½ in 2020 — and beyond — you can wait until age 72 to begin your mandatory distributions.

You can contribute to a traditional IRA after age 70½ — The new law will allow contributions to traditional IRA accounts after 70½ as long as you have enough earned income. This is a nod to the fact that many people are working after the “normal” retirement age, so still making a salary. Unfortunately, dividends and capital gains are not considered earned income.

Penalty-free withdrawals from retirement plans are allowed for adoption/birth expenses — A “qualified birth or adoption distribution” of up to $5,000 may be taken out of an eligible retirement plan upon the birth or adoption of a child.

Inherited IRA accounts — Upon the death of an account owner, distributions to individuals must be made within 10 years. Previously, there was no time limit for those distributions to take place. There are exceptions for spouses, disabled individuals and individuals who are not more than 10 years younger than the account owner, but this is certainly something to keep in mind as you select your beneficiaries.

As always, feel free to reach out to us to discuss any questions you may have about any of these changes. While nothing herein constitutes tax advice, we want to ensure you’re in the know about new laws that can affect your retirement planning. You should still seek advice from your individual tax advisor for your unique situation and needs.

Continue Reading

Other articles filed under Market Commentary

The Morgan Report Q2 2021 Review – Invest in Coffee!

July 23, 2021 - On July 12, The Wall Street Journal reported coffee prices were soaring due to drought in Brazil, the world's biggest coffee producer. With the prospects of coffee demand exceeding supply, it would seem readily apparent that coffee prices will continue...
Continue Reading

The Morgan Report Q1 2021 Review – An Advocate for Your Values

April 19, 2021 - The last year has been full of challenges that negatively affected our lives. As individuals and families, we’ve had to adjust and be resilient—qualities that will not only help us be successful in life, but in investing as well. The...
Continue Reading

The Morgan Report Q4 2020 Review – Lessons Learned

January 25, 2021 - 2020. Whew! I’m sure we’re all glad that’s over with, but as they say, beware what you ask for. Thankfully, my clients have stayed healthy and have mostly relegated to focusing on other areas of their lives like work, family,...
Continue Reading

The Morgan Report Q3 2020 Review – Get Your FAANG’s Out?

October 14, 2020 - Our experiences are not only, by definition, our lives; they shape our outlook on our future potential and everything around us. Recent negative experiences can hold us back from achieving those things we want to accomplish in life—sometimes temporarily, or...
Continue Reading

The Morgan Report Q2 2020 Review: Walking The Dog

July 17, 2020 - Why does it seem like the investment markets rarely do what you want or expect them to do? It’s like walking a dog. Imagine someone walking a straight line down the sidewalk and hoping the dog will follow the same...
Continue Reading

Return to Blog Home