SECURE Act Changes

On December 20th, 2019 President Trump signed the Further Consolidated Appropriations Act 2020 (FCAA 2020) into law.  The Setting Every Community Up for Retirement Act (SECURE Act) was part of the FCAA 2020.  The following are a few highlights of the SECURE Act:

  • Age 72 is the new age 70 1/2.  The required beginning date for required minimum distributions (RMDs) increases to age 72.
  • “Stretch IRAs” and payments from defined contribution plans will have a new 10-year distribution maximum for death benefits.  New rule does not apply to spouse beneficiaries, minor child, etc.
  • Traditional IRA annual contributions will be permitted for those over age 70 1/2.
  • In-service distribution from 457(b) as early as 59 1/2 years old.
  • In-service penalty-free withdrawals for birth or adoption of a child.  Individuals can take up to $5,000 as a penalty-free early withdrawal from their qualified retirement plan savings to help pay for childbirth or adoption expenses — with repayment permitted at a later date.