Yes, our Congress and President has been busy agreeing to something— this new legislation was passed on December 20, 2019 and signed into law. It affects all Americans. Here are the highlights:
- New Age for Starting IRA Required Minimum Distributions (RMD’s). If you were born after 1949 now you must take distributions at age 72. The past requirement of age 70 ½ does not affect those persons born after 1949.
- The “Stretch Out” on IRA non-spouse distributions has radically changed. The new law mandates that most “non-spouse” beneficiaries (e.g., children) must receive all their intended benefits by the 10th year following the death of the account owner. THEY MUST CASH IT OUT AND PAY REQUIRED TAXES!
- There are exceptions to this rule: The 10 year stretch out limit does not apply to:
--spouses
--a child who has not attained the age of majority at the death of the IRA owner
--a “disabled beneficiary” defined by the Tax Code
--a “chronically ill beneficiary as defined by the Tax Code
--A beneficiary who is not more than 10 years younger than the account owner (e.g., older sibling).
If this new law concerns you and you have questions, please call the Nawrocki Center at 810-229-0220 to make an appointment and we can explain how the affects you individually.