While most of us were enjoying the holidays, our friends in Washington were busy tinkering with traditional Individual Retirement Accounts (IRAs).
As you may have heard, Congress passed legislation late last year that changed the rules for traditional IRAs and other defined contribution plans. These changes went into effect on January 1, 2020.
Over the years, there have been many changes to the tax laws affecting retirement, and this one is no different. If you reach age 70½ in 2020, you can delay taking your first required minimum distribution (RMD) on your traditional IRAs until April 1 of the year after you turn 72. If you turned 70½ in 2019, you will still be required to take your first RMD by April 1, 2020. This may not sound like a big deal, but I can assure you, keeping your money in a tax-deferred account for another 18 months may alter some of the retirement income projections we have created.
The other thing that’s changed? You can continue contributing to your Traditional IRA past age 70½. There’s no requirement to stop contributing as long as you meet the earned income requirement.Â
Of course, your particular situation may warrant some adjustments. I’m happy to talk to you about any questions you have. And we’ll be keeping a close eye on the legislation, to say the least.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2019 FMG Suite.
