Welcome to February! If the groundhogs know what's up, then hopefully we'll be welcoming spring sooner rather than later. I guess we'll all have to keep our fingers crossed and our thoughts on sunny skies.
The Wealth Report covers a topic that many of you may have heard about recently - The SECURE Act that was just passed in December. The SECURE Act addresses several retirement-focused matters, but there are a few key points that make up the meat of the law. The biggest changes are in regards to RMDs and Stretch IRAs. Check out the article for more detail on the other components that will be going into effect.
The age at which Required Minimum Distributions must begin being drawn from IRA accounts has been increased from
0½ to 72 for anyone who has not yet reached 70½ by December 31st, 2019. This will allow seniors the option of leaving their qualified accounts to grow tax-deferred for a bit longer. For some, this may be a good thing, while others may still find themselves needing to draw from IRAs earlier than 72 to meet their income needs. Either way, it gives you a little more flexibility in deciding when you want to tap into your IRAs.
The change to Stretch IRAs is more of a matter that will affect heirs than actual account owners. Previously, IRAs that were inherited or paid out to non-spouse beneficiaries could have payments stretched out over the lifetime of the heir, which lessens the tax burden that would be faced when taking a lump sum or larger payments over a shorter period of time. The SECURE Act has disallowed stretching IRA proceeds over a lifetime and has instead mandated that the full balance of the inherited IRA must be taken within 10 years.
All in all, the SECURE Act is intended to help retirees. Any of the changes should be taken into consideration when reviewing your retirement/financial plan. If
there is anything we can assist you with or if you'd like to review your current retirement plan, then just let us know.
And, as always, remember -
The purpose of the money dictates where you put it.