There are other aspects of the SECURE ACT not covered here but these are the four that are most notable.

1. RMD age increased from 70 ½ to 72

Required Minimum Distribution (RMD) from traditional IRAs now begin at 72 instead of 70 ½. This applies to people who were not 70 ½ by the end of 2019.

2. Penalty Fee withdrawals for Birth or Adoption

Investors can take up to $5,000 from retirement plan in the event of a birth or adoption of child and not be assessed the 10% early distribution penalty.

3. Removal of age limit on IRA Contributions

If you have earned income (i.e. salary, commission, bonus) you can continue to make contributions.

4. Stretch IRAs limited to 10 years for most beneficiaries

This may be the most unfavorable part of the legislation. Now, certain beneficiaries will take all distributions within 10 years. Those not affected by this limitation include:

  • Surviving spouses
  • Disabled and chronically ill
  • Children under the age of majority (until they reach age of majority)
  • Individuals who are not more than 10 years young than the owner

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Other aspects of law not covered but these are the most notable.