The SECURE Act (Setting Every Community Up for Retirement Enhancement Act of 2019) goes into effect Jan. 1, 2020, assuming President Trump signs the bill into law.
Some benefits of the new law make it easier for employers to offer retirement plans with lifetime income options through annuities, as well as increased tax incentives for small businesses to offer retirement plans in the first place.
What you need to know about the SECURE Act –
- Penalty-free withdrawals for new parents: Within a year after a birth or adoption, new parents can withdraw up to $5000 from a qualified retirement plan to aid in the costs of the new family member without having to pay a penalty on the withdrawal.
- Inherited IRAs Capped: As we recently discussed in a previous post, 5 Things You Need to Know When You Inherit an IRA, non-spouse beneficiaries had to decide whether to take distributions from the IRA over their life expectancy or whether to liquidate the IRA within five years from the decedent’s date of death. The SECURE Act now requires inherited IRAs to be depleted within 10 years (does not apply to spouses). This will increase taxes owed and bring in an estimated $15.7 billion to the US Treasury over the next ten years.
- The age for required minimum distributions is increasing from 70 ½ to 72.
For more information on how the SECURE Act and other new laws may impact your estate plan, contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.