Changes To Retirement Accounts For 2020

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Changes To Retirement Accounts For 2020
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• Right at the end of 2019, the US Senate passed a
  1.4 trillion dollar spending deal that included
  new retirement legislation known as the SECURE
  Act. Affecting many aspects of retirement, the
  new law may have direct implications for the
  middle class and their beneficiaries.
• For those who may be approaching retirement, or
  are considering preparing for the future,
  familiarising yourself with these changes is a
  sensible idea

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• Changes to Required Minimum Distribution (RMD)
• Back in 2019, and beginning at the age of 70 1/2,
  retirees were required by law to begin taking
  Required Minimum Distributions, or RMDS, from
  their TSPs and IRAs, and has long been a common
  and popular strategy in many peoples retirements
  plans. If this is your strategy, then you can now
  choose to postpone your first RMD for another
  year, until you reach the age of 72.

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• Stretch IRAs come to an end
• Spreading your tax burden out over a lifelong
  period is a great way of planning and stretch
  IRAs enabled beneficiaries to do exactly that.
  Leaving their assets in an inherited IRA account,
  they could spread out the distributions, and this
  so-called stretching gave many the chance to pay
  less in taxes while the assets in the IRA
  continued to grow. However, with the passing of
  the SECURE Act, those beneficiaries now have only
  a window of 10 years to deplete all the assets
  from their inherited IRA.

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• No age limit on IRA contributions
• In previous years, anyone older than 70 ½ years
  were not allowed to contribute to an IRA.
  However, since the passing of the SECURE Act,
  this is no longer the case and as of 2020, any
  person with earned wages, irrespective of their
  age, can contribute to an IRA.
• While these changes that have come as result of
  the SECURE ACT may not have an immediate effect
  upon you as a retiree, it is important that you
  understand any changes that might have an impact
  upon you in the future. The more you know and
  understand, the better prepared you can be to do
  everything to maximise your assets and pass your
  wealth on efficiently.

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