SECURE Act of 2019

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 was recently passed by the House Ways and Means Committee.  It has been reported that the SECURE Act has bipartisan support and many people feel it has a strong chance of becoming law.  A couple of highlights from the bill that may be relevant to readers of this blog:

  • Increase age of Required Minimum Distributions (RMDs) from 70 1/2 to 72 years old
  • Significant changes to the “stretch IRA” rules

Regarding the proposed stretch IRA changes, non-spouse beneficiaries would generally be required to distribute the retirement account within 10 years.  This clearly would not be favorable to non-spouse beneficiaries of a Roth IRA.  There are a few non-spouse beneficiary exceptions to the 10 year rule; disabled or chronically ill individuals, individuals who are not more than 10 years younger than the account owner, or child of the account owner who has not reached the age of majority.