Financial FitnessGeneral Information

What Has Changed In the New SECURE Act?

By March 26, 2020 No Comments

The SECURE Act of 2019, which stands for Setting Every Community Up for Retirement Enhancement, was signed into law as part of a government funding package on December 20, 2019.  The SECURE Act is the most comprehensive retirement savings package to become law since the Pension Protection Act of 2006.

I want to highlight a few of the changes that may impact you if you have a retirement plan or currently have an IRA, as it impacts people that are currently retired.

One of the changes was the increase in the mandatory required minimum distribution age, or better known as RMD.  Under the new SECURE Act, the required minimum distribution will begin in the year after the IRA holder turns 72.  That’s up from the current age 70 ½.

The other big change is under the inherited IRA and defined contribution plan distribution requirements.

Under the new SECURE Act, balances of inherited IRAs and inherited defined contribution plans like 401(k)s generally are required to be distributed by the end of the 10th year after the IRA owner or plan participant has passed away.

Under the current plan, any non-spouse that is inheriting retirement accounts can stretch that IRA over their lifetime.  Exceptions to the 10-year distribution rule include assets left to a surviving spouse, a minor child, a disabled or chronically ill beneficiary, and beneficiaries who are less than 10 years younger than the original IRA owner or 401(k) participant.

The third major change under the Secure ACT is withdrawals of up to $5,000 from IRAs or employer sponsored plans are allowed in the year following the birth or adoption of a child, and the 10% early penalty tax would not be assessed.


The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

We suggest that you discuss your specific tax issues with a qualified tax advisor.