What to Know About New Retirement Rules

From: REAP, LLC. | Retirement & Estate Advisors & Professionals

Are you familiar with the new provisions about retirement accounts from the SECURE Act and coronavirus relief bill?

Some of these changes may affect how you make retirement decisions in the coming weeks and months.

These new rules don’t apply to everyone and it’s important to reach out to discuss your situation before making any big changes, but if you need a quick recap of a few key details, take a look:

401(k) Distributions

• Per the Coronavirus Aid, Relief and Economic Security (CARES) Act, qualified participants younger than 59½ won’t pay the usual 10% penalty on up to $100,000 in early distributions from their 401(k) in 2020.
• You’ll still owe income taxes on your distributions, but you can spread the payments over the next three years.
• If you take an early distribution due to the coronavirus and redeposit all or part of the total amount within three years, the repayment amount each year won’t count toward your annual contribution limit for that year.

Required Minimum Distributions From Retirement Accounts

• The coronavirus relief bill waives RMDs in 2020.
• It’s also important to note that the SECURE Act, which was signed into law near the end of last year and includes a number of provisions related to retirement, pushes back the age for taking required minimum distributions from 70½ to 72 beginning in 2020.

Extended Tax Deadline

The extension of the tax deadline to July 15 also extends the deadline to contribute to your IRA until July 15. This means you have the opportunity to max out your contribution at $6,000 for 2019 (or $7,000 if you’re 50 or older).

Do you have questions or need some assistance? Reach out if you’d like to go over anything in more detail.

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