Important IRA Changes
On December 20, 2019, the Secure Act was signed into law, effective January 1, 2020. This legislation includes changes that affect Traditional and Roth IRAs. Here is a summary of the changes that may affect your IRA.
- Traditional IRA contributions at any age:
- Taxpayers with earned income can make Traditional IRA contributions at any age, not just for years before reaching age 70 1/2, as under previous law. (Effective for 2020 and later taxable years.)
- Delayed age for beginning RMDs:
- The age when required minimum distributions (RMDs) from Traditional IRAs must begin is increased from age 70 ½ to 72. (Note, since this law was passed, the IRS is giving IRA owners of RMD age the right to waive their RMD for 2020 due to COVID-19.)
- More rapid payouts to non-spouse (and other) beneficiaries:
- Most non-spouse beneficiaries of IRAs will generally be required to distribute inherited amounts within ten years. (Effective for plan participant/IRA owner deaths in 2020 or later years.)
For more information on these changes, please seek advice from a tax professional.
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