Is Your Retirement Plan Ready for the SECURE Act?
New Bedford, MA (Law Firm Newswire) March 11, 2020 – On December 20, 2019, the U.S. Congress passed a comprehensive spending package which included provisions for The SECURE Act. The measure, formally known as the Setting Every Community Up for Retirement (SECURE) Act, includes reforms designed to make saving for retirement easier.
At Surprenant & Beneski, P.C., we are encouraging our clients to revisit their retirement and estate planning strategies in light of the SECURE Act, which became effective on Jan. 1, 2020. The new law includes changes that will affect individual retirement accounts (IRAs), defined benefit pension plans, defined contribution plans (e.g. 401(k)s), and 529 college savings accounts.
Key provisions of The SECURE Act include:
* Repealing the maximum age (70½) for traditional IRA contributions
* Increasing the required minimum distribution (RMD) age for retirement accounts from 70½ to 72
* Offering more options for lifetime income strategies
* Revising the rules for inherited IRA distributions
With respect to inherited IRAs and 401(k)s, beneficiaries could previously “stretch” their distributions and tax payments over their life expectancy. The SECURE Act now requires many beneficiaries to withdraw those assets within 10 years of the death of the original owner; surviving spouses, minor children and other beneficiaries are exempt from the 10-year rule, however.
“If you are currently contributing to an IRA or 401(k), it is important to understand how the SECURE Act will impact your retirement plan. Similarly, if you have an IRA that you intend to leave to beneficiaries, our experienced estate planning attorneys can help you explore all your options.”
Surprenant & Beneski, P.C. is a premiere elder law and estate planning practice servicing clients in Southern Massachusetts, Cape Cod and the Islands from our office locations in New Bedford, Easton, and Hyannis. Our practice is dedicated to helping individuals, couples and families plan their financial futures. For those with questions about how the new law affects retirement or estate planning strategy, please do not hesitate to contact our office.