SECURE Act makes changes to your retirement account in 2020
New in 2020, people need to gear up for changes to their retirement account thanks to the SECURE Act. Congress passed the SECURE Act just before the holidays, it took effect on January 1.
Some of the changes under the SECURE Act include required minimum distributions starting later, at the age of 72. Before the SECURE Act, people had to start withdrawing from retirement accounts at age 70 and a half. The SECURE Act also increases the maximum age to contribute to traditional IRAs from age 70 and a half to 72. There are other changes to IRA contribution and withdrawal rules. Several additional provisions make it easier to contribute to and withdraw money from IRA accounts in some specialized cases.
There are also changes for beneficiaries. In most cases, people will now need to withdraw money from IRAs they inherit within 10 years.
There are also changes to annuities. Annuities can be a controversial type of insurance. This bill gives new protections to companies that offer annuities, which could mean more annuity offerings.
As with most personal finance policy, these changes will apply a little differently to each person.
Michelle Goldsberry, the President and Owner of PSC Accounting and Tax Services in Springfield, said many of her clients are happy about the changes because they're working later in life. "Some people in their older years are still working, they're bored at home, or they just want to continue to work to put away for retirement 'cause they retire later in life," began Goldsberry. "They're happy they can still contribute to the company's 401K plans, they're happy they can still contribute to their IRA without having to take that distribution to add to taxable income."
There's also a portion of the SECURE Act that changes things for those who adopt children, and another section that allows some 529 plan money to be used toward student loans.
Goldsberry advised those with questions to talk with their accountant about the SECURE Act.
PSC Accounting and Tax Services is located at 1200 East Woodhurst Drive, Building C, in Springfield.