Making Cents with Financial Adviser Scott Fanatico

Financial Services

Financial Adviser Scott Fanatico with the Financial Services Center talks with Kristen about the top three changes in the new SECURE Act that was signed into law by President Trump on December 20, 2019.

Dec 20 2019 President Trump signed into law the SECURE Act. The top 3 areas of impact are

  1. Required Minimum Distribution
  2. Traditional IRA contributions after age 70 1/2
  3. New 10-year rule for Inherited IRA

Before ACT once you turned 70 1 /2 there was a requirement to take minimum distribution. Typically led to taxes being paid because it is categorized as income.

· Starting 2020 for NEW RMD eligibility the age requirement is 72. Already taking no change

· If you are 70 1 /2 yrs old, have a Traditional IRA and you have “earned Income” Can have 2020 contribution

· Prior to the SECURE Act a non-spouse who inherits an IRA was required to take required minimum distributions, but you could have extended the withdrawals over your lifetime to minimize taxes. This is referred to as a “Stretch IRA”

· No longer. There are few exceptions, called eligible designated beneficiaries, but most will now upon inheriting an IRA the account must be fully distributed by the end of the 10th year. At the end of 10 years the account must be at ZERO balance.

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