The SECURE ACT and your Retirement
The SECURE Act (Setting Every Community Up for Retirement Enhancement) was major legislation passed by Congress and signed into Law at the end of 2019.
Key takeaways—The SECURE Act:
- Repeals the maximum age for traditional IRA contributions, which is currently 70½. Taxpayers of any age may now contribute to IRAs when other requirements are met.
- Increases the required minimum distribution (RMD) age for retirement accounts to 72 (up from 70½).
- Inherited IRA distributions generally must now be taken within 10 years instead of stretched over a non-spouse beneficiary’s lifetime, subject to limited exceptions.
- Allows long-term, part-time workers to participate in 401(k) plans.
- Offers more options for lifetime income strategies.
- Permits parents to withdraw up to $5,000 from retirement accounts penalty-free within a year of birth or adoption for qualified expenses.
- Allows parents to withdraw up to $10,000 from 529 plans to repay student loans.
What to do now?
- RMDs now begin at age 72 for anyone who turns 70 ½ in 2020 or later. This may impact some retirement plans as other options to meet cash flow needs may make delaying distributions from retirement accounts preferable. Contact your WBH advisor to discuss how your plans could change.
- If you turned 70 ½ in 2020, some account custodians (including Schwab and Fidelity) may have sent out statements regarding 2020 RMDs that contained errors. Please contact your custodian or advisor to discuss your 2020 RMD if this may have impacted you.
- Estate plans may need to be reviewed as a result of the SECURE Act. The benefits of Inherited IRAs for some beneficiaries have been reduced. Understanding how your heirs may be impacted is the first step to considering any changes to long made plans. Please contact your WBH advisor to discuss other options available to you.
- Don’t be overwhelmed. While change can be frustrating, there are solutions available and we are here to help!
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by WBH Advisory, Inc. [“WBH”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from WBH. Please remember that if you are a WBH client, it remains your responsibility to advise WBH, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. WBH is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the WBH’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.wbhadvisory.com. Please Note: WBH does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to WBH’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Also Note: IF you are a WBH client, Please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.