Retirement Accounts

Changes made by the 2019 SECURE Act to required minimum distributions (RMDs) may affect your retirement accounts. If you turn 70½ after 2019, you can now wait until age 72 to start taking mandated annual withdrawals from your retirement accounts. Updated life expectancy tables proposed by the IRS for 2021 would change how you calculate those amounts. Also, children who draw on a deceased parent’s retirement account now have 10 years to withdraw, effective for distributions starting in 2020.  If you inherited an IRA from an account holder who passed away prior to January 1, 2020, you can continue the current distribution schedule.

The new law also impacts Sec 529 accounts.  Tax-free distributions now include up to $10,000 for repayment of qualified student loans, and expenses for certain apprenticeship programs.  This change was made retroactive to distributions after December 31, 2018.