Comprehensive federal legislation referred to as the Setting Every Community Up for Retirement Enhancement (SECURE) Act (the “Secure Act”), became effective on January 1, 2020. The Secure Act makes changes to federal policy which may impact planning related to defined contribution plans, defined benefit plans, individual retirement accounts, and 529 plans. This article focuses on certain changes that impact owners and beneficiaries of retirement accounts, including traditional individual retirement accounts, Roth individual retirement accounts, and 401(k) and 403(b) plans (collectively “IRAs”).
Required Minimum Distributions to Account Owner:
The Secure Act raised the age at which an IRA owner is required to take minimum distributions (“RMDs”) from 70½ to 72 years old, for any account owner who turned age 70½ after December 31, 2019.