How about some good news for once?  With all the COVID stuff going on and people debating mask versus no mask, here is a little information to help you in your financial planning.  If you are near retirement age, it is extremely important to understand the Act.  It could help you stretch your retirement dollars a little further.

The 2020 SECURE Act (Setting Every Community Up for Retirement Enhancement Act was signed and passed by Congress on December 17, 2019.  It makes major changes to the way you should handle your IRA when close to or near retirement age.  The implications matter to your retirement and estate.

First and foremost, 2020 SECURE Act removes the usage of the stretch IRA as an estate planning strategy.  The Stretch IRA is a very popular estate planning tool.   In the past, these tools were used to gain tax favorable treatment through tax-deferred income and pass those benefits surviving relatives regardless of their age.  As a result, inherited benefits must be liquidated within 10 years.  Mishandling of this planning strategy could lead to unwanted taxable events.

Secondly, 2020 Secure changed the age in which IRA holders must begin taking their Required Minimum Distributions from age 70 ½ to age 72.  This stipulation gives IRA holders additional time to plan for retirement.  With that extra retirement planning time, look for ways to further maximize your IRA dollars.

Over the past 100 years, the American life expectancy has increased to seven years.  Living longer means working longer.   Subsequently, the SECURE Act repeals the maximum age for IRA contributions.  As a result, IRA holders can now fund their traditional accounts for as long as they continue working, regardless of age.

So, there you go.  Pretty straight forward.  The 2020 SECURE Act creates the potential to an additional moneys to your IRA even after age 70.  See your financial professional with questions about ways to increase IRA’s bottom line.