Financial Insights

Secure Act Sets Up Sweeping Changes for Retirees

Back in May, we noted that the House had passed a bill that if approved in the Senate would set sweeping changes to many retirees and beneficiaries of IRAs.  Well, it looks like Washington was able to agree on something this year as the Secure Act was passed by Congress in a flurry of last-minute deal-making in mid-December. The bill was one of two bills to fund government operations that averted a government shutdown that would have taken place on December 20th.  The bill was approved by the House of Representatives on December 17, and the Senate followed suit on December 19. President Donald Trump signed it into law on December 20.

Key provisions in the retirement savings portion of the bill include:

Here are three quick takeaways that clients should consider.

Clients who have turned or will turn 70½ before December 31, 2019, should ensure that they have taken their RMD or have plans to do so prior to the deadline of April 1, 2020. If you turn 70½ on or after January 1, 2020, you will not need to begin taking required minimum distributions until 2022.

Investors who have estate plans that include leaving retirement accounts to heirs should consider reviewing those plans with our wealth advisors to determine whether any changes need to be made based on the new law.

Investors over 70½ who have earned income should consider discussing with their advisor whether the new rule permitting ongoing contributions to an IRA makes sense for their situation.

We suggest conversations with your advisor to make sure that you are planning correctly with the new laws.

The foregoing content reflects the opinions of Advisors Capital Management, LLC and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.


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