On December 20, the retirement savings bill, know as the SECURE Act, was signed into law by President Trump. Here are 5 key highlights:
- RMD Age: Required minimum distribution (RMD) age has been increased from 70 1/2 to 72
- Contributions to traditional IRAs after age 70 1/2: the law ends the prohibition on contributing to an IRA after 70 1/2.
- New rules for inherited retirement accounts: Under current law, inherited retirement accounts can distribute those assets over the beneficiary’s lifetime. Under the new law, those assets must be distributed within 10 years. Exceptions to the new law: spouses, minor children, disabled individuals, and people less than 10 years younger than decedent.
- Penalty-free withdrawals for birth/adoption expenses: can withdraw up to $5,000 from an IRA or employer plan to pay for birth/adoption expenses
- 529 Plans: can now be used to repay up to $10,000 in student loans