Offered by: Michael A. Dolan – Dolan & Associates, P.C.
Congress passed the SECURE Act in late 2019 and the CARES Act in March. These two Acts changed how retirement assets are treated during your life and after your death. Here are a couple of important considerations you should know.
The changes increased the age at which you must begin to take distributions from your retirement plan. You must now begin to take distributions beginning the year you turn 72, instead of the year in which you turn 70 ½. However, if you reached age 70 ½ in 2019, you must take distributions starting at age 70 ½.
You do not need to take a required minimum distribution for calendar year 2020 from most plans. This allows you to leave additional money in your retirement plan. If you don’t need the money to live on, you should leave the money in your retirement plan and not take a distribution for 2020. The financial markets are down and, because of an executive order by President Trump, the IRS was forced to update the mortality tables; which resulted in a reduction in the amount you are required to withdraw in 2021 and every year going forward.
There were also significant changes to how and when your beneficiaries must withdraw the assets from your retirement plan after your death. Anyone who has retirement plan assets should meet with their knowledgeable estate planning attorney to update their estate plan and review how they are addressing their retirement plans. Particularly, if you put specific plans in place for stretching out the income tax deferral related to retirement assets, putting a solid plan in place around handling these types of assets is critical.
If you have questions about these issues, I encourage you to learn about the subject. If you would like to gain more knowledge about available estate planning options, visit: www.EstatePlansThatWork.com to sign up for a complimentary virtual workshop.
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