Getting SECURE With Recent Changes in Retirement Planning
The Legal Intelligencer
The Setting Every Community Up for Retirement Enhancement Act of 2019 (the SECURE Act), which became effective Jan. 1, 2020, significantly changed traditional notions of retirement and estate planning. Just when planners began to feel more secure with the SECURE Act, on Feb. 23, the Internal Revenue Service issued proposed regulations that were aimed at clarifying the provisions of the SECURE Act but which surprised many planners with new interpretations of the SECURE Act. While these regulations are just proposed (and additional changes may occur in the future), the proposed regulations should now be considered when engaging in retirement planning.
Individual retirement accounts (IRAs) are not taxed for income tax purposes until assets are distributed from the IRA. As a result, an owner (or plan participant) is generally required to take a required minimum distribution (RMD) from an IRA by Dec. 31 of each calendar year, starting on April 1 in the year after the plan participant turned 72 years (referred to as the “required beginning date” or RBD). Upon the death of the plan participant, a named beneficiary is required to take distributions or RMDs from the inherited IRA depending upon whether the deceased plan participant had reached the RBD and the identity of the beneficiary.
Read the full article here.