SECURE Act – Increased Required Beginning Date

The SECURE act was signed into law on December 20, 2019.  There are some key provisions that may have an impact on your retirement strategy.  Let’s focus on the increased required beginning date.  This applies to Required Minimum Distributions, or RMDs.

OLD LAW – RMDs generally must begin by April 1 of the calendar year following the calendar year in which the individual (employee or IRA owner) reaches 70 ½, subject to an exception for certain plan participants.  The deadline is called the “required beginning date.”

NEW LAW – Starting in the 2020 tax year, the age triggering the required beginning date for plans and IRAs is 72

WHAT IT MEANS – You can hold off on taking money out of your IRA or retirement plan that you don’t need.  This change applies to distributions required to be made after 12/31/2019.  So, if you turned 70 ½ on 12/31/2019 (born 6/30/1949) you will still have to take your first RMD by April 1st, 2020.  The magic date is 7/1/1949, if you were born after that you can hold off on your RMD until age 72.  This can impact your retirement strategy so be sure to understand how this provision may affect you.

Check out the other key provisions of the SECURE Act

SECURE ACT Key Provisions

SECURE ACT Detailed Summary