SECURE Act and 2020 Tax Updates
The Setting Every Community Up for Retirement Enhancement (SECURE) Act became Public Law No. 116-94 on December 20, 2019. Provisions of the Act apply to retirement plans in 2020 and later.
In response to the SECURE Act, PlanFacts applications have lifted the restriction of making contributions to retirement plans after age 70 ½ if earned income is available. Retirement plans have been updated to require minimum distributions starting at age 72 instead of 70 ½ for those individuals who turn 70 ½ in 2020 or later. An excerpt has been added to important notes to reflect the SECURE Act provisions.
One of the most significant changes made by the SECURE Act to impact financial advisors is the elimination of the ‘Stretch’ provisions for non-spouse beneficiaries of inherited IRAs and other retirement accounts. Therefore, the Qualified Plan Concepts tool will no longer illustrate the three multi-generational approaches to stretch IRAs to beneficiaries.
In addition to the SECURE Act, Social Security, qualified plan limits and estate tax exclusions have been updated for 2020.