What is the SECURE Act? And how does it impact your retirement plans? We’ll outline some of the major changes you need to be aware of in this two-part series.
(Click the featured times below to jump forward in the episode)
Recently passed in Congress, the SECURE Act stands for Setting up Every Community for Retirement Enhancement. But what does this mean for you?
A big change included the RMD age raising to 72. How does this impact you? The RMD age was previously 70 and a half, so now those required minimum distributions don’t have to be taken out until later. This allows you to keep your money deferred for a longer period of time. You can take it out sooner though if you need it. The RMD being pushed back means you have more time to plan for what works best for you (as long as you haven’t already started taking your RMDs).
Remember, just because you take out RMDs doesn’t mean you have to spend it. There are basically three choices of what you can do with an RMD: you can spend it, you can gift it, or you can save it. Consider the different tax implications or strategies with each of these options.
Your advisor should keep you updated on all of these changes. For most people, their largest or second largest account is their qualified plans outside of their house. It’s where the most money is, the money that is going to support you all throughout retirement. Working with someone who is aware of the changes will help you make the best decisions and protect your nest egg for the future.
Listen to the full episode to learn more about the SECURE Act or click on the timestamps below to hear about specific aspects of it.
[0:48] – The SECURE Act passed, so what does that mean?
[2:17] – The RMD age was raised to 72 years old.
[4:26] – If you began taking RMDs in 2019, do you have to keep with it?
[5:43] – What can you do with your RMD?
[8:01] – The contribution age limit was also eliminated with the SECURE Act.
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