[This episode is part of the LGBTQ Series of the Midlife Money Gal Podcast]
The SECURE Act was quietly signed into law in late 2019, most likely when you were enjoying your holidays! With this new law in place, there are some important changes to know about with your retirement planning.
The SECURE Act stands for “Setting Every Community Up for Retirement Enhancement” (in case you were curious) :).
One of the major changes affects distributions from IRA accounts. Previously if you inherited an IRA, in most cases you were allowed to take distributions from that IRA over your life expectancy. Now, you must take IRA distributions out over a 10 year period.
The government wants to collect your tax dollars more quickly than over your expected lifetime! It doesn’t matter if you take the funds all in year one, year ten, or spread it out evenly over the entire time frame.
This new 10 year rule will undoubtedly disrupt the ongoing deferred growth in your IRA. But there are a few exceptions, including the fact that the rule does NOT apply to spouses! Yet another benefit for LGBTQ partners to marry in my opinion.
Subscribe and listen to this episode on iTunes, or wherever you listen to podcasts, to learn:
- Additional exceptions to the 10 year IRA distribution rule
- The dangers of leaving your IRA to a trust as the beneficiary
- The new age for starting your RMD from your IRA (Required Minimum Distributions)
- What the SECURE Act allows for new parents
- A small but important change to 529 college accounts
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