• Larry U

Secure Act Impacts on IRA's

The IRALOGIX compliance team, including our in-house ERISA attorneys, has been analyzing the provisions of the SECURE Act. Here are some of the important changes affecting IRAs and IRA plans.

• Traditional IRA contributions permitted after age 70½ – Effective beginning with the 2020 tax year, IRA owners age 70½ and older with earned income may contribute to a Traditional IRA.

• RMDs begin at age 72 (instead of 70½) – Effective for anyone who did not reach at least age 70½ in 2019, the new starting age for taking required minimum distributions (RMDs) is 72.

• A new exception to 10% early distribution tax – Effective for distributions taken on or after January 1, 2020, individuals who withdraw up to $5,000 to help pay for adoption or childbirth expenses have an exception to the 10% early distribution tax and may recontribute the amount distributed to an IRA.

• Increased tax credits for small businesses – Effective January 1, 2020, a small business may receive a tax credit up to $5,000 per year for three years for plan expenses associated with establishing a SIMPLE IRA plan. An extra tax credit is available for those that add automatic enrollment.

• “Stretch IRA” effectively eliminated – Effective for individuals who become beneficiaries following a death in 2020 or later, non-spouse beneficiaries will be required to deplete their inherited IRAs within 10 years following the IRA owner’s death. (Exceptions apply for disabled or chronically ill individuals, individuals not more than 10 years younger than the IRA owner, and minor children of the IRA owner until they reach the age of majority.)

Special thank you to IRALogix legal team for providing this information. IRALOGIX is a financial tech company based in Pittsburg, PA.

3 views0 comments

Recent Posts

See All

Successful investing is simple; it is about using common sense. Warren Buffett has said it is simple to invest in your retirement, but it is not easy. ( I added the words "your retirement" into Mr. B

THE STOCK MARKET Yesterday the Dow Jones and the S&P 500 set new records. I recommend my clients rebalance their stock/equity portfolios and re-allocate profits to lesser performing portfolio invest