As part of the year-end spending bill approved by Congress, the SECURE Act (“Setting Every Community Up for Retirement Enhancement”) was signed into law. The highlights, both good and bad, are as follows:
- Starting in 2020, contributions to traditional IRAs may be made by an individual at any age; the age 71 limitation has been removed.
- For those individuals who reach age 70 ½ after December 31, 2019, the age at which Required Minimum Distributions (RMD) must start to be taken has been moved from 70 ½ to age 72.
- With respect to IRAs of decedents dying after December 31, 2019, all beneficiaries, other than spouses, must take the entire IRA within 10 years of the decedent’s death (although all can be taken in year 10). This effectively eliminates the planning tool of “stretching” inherited IRAs for children and grandchildren.