• Robert DiCristofaro

The 2019 Secure Act, and How It Effects You.


In 2019 the federal government passed the Secure Act of 2019 and it just went into effect January 1st 2020. While some of the provisions will not take effect for a while, there are a couple that probably effect you right now. One of the biggest changes, in my opinion, is the age in which you have to take your Required Minimum Distributions from qualified plans, like 401Ks, 403Bs, and IRAs. The old rule required you to start taking RMDs the year you turned 70 1/2. In an effort to simplify this rule the new required age for RMDs is now 72. Though if you turned 70 1/2 in 2019 or were already taking RMDs you are required to continue taking them.


The 2nd biggest change, again in my opinion, is the end of the Stretch Beneficiary IRA. This effects non-spousal beneficiary IRAs of decedents who passed away after 1/1/2020. With the old rule you could "stretch" out the payments over time based on the RMD table for the owners life expectancy. With the new rule you must pull all of the funds out of the non-spousal Beneficiary IRA by the 10th anniversary. The RMD method of taking funds out of a beneficiary IRA is still available for spouses, minors and disabled persons.


Some of the other changes the Secure Act made are allowing part-time employees to contribute to retirement plans, removing the maximum age limit for contributions into qualified plans (formerly 70 1/2), up to a $5,000 penalty free withdraw from retirement plans for the birth of a child, and the relaxing of rules on employers offering annuities in their 401k plans. They also made it easier for small business to offer 401k plans to their employees.

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