On December 20, 2019, President Trump signed the Setting Every Community Up for Retirement Enhancement (SECURE) Act. This new law does several things that will affect your ability to save money for retirement and influence how you use the funds over time.
Similarly one may ask, what are the IRA Changes for 2020?
Age restriction eliminated
Starting in 2020, taxpayers with earned income may make contributions to traditional IRAs at any age. … This means IRA owners age 70½ or older in 2019 cannot make prior-year contributions for 2019 in 2020, as they fall under the old eligibility rule.
RMDs are expected to be on the books for 2021, however, as the CARES Act showed in 2020, things can change quickly. Congress is expected to consider a bill in 2021 that would move the RMD age back to 75, but it’s unlikely that the age 75 provision would apply retroactively should the bill pass.
Correspondingly, how will the new tax law affect retirees?
The Big Change: Larger Standard Deduction
For individuals, the standard deduction climbs to $12,000, from $6,500, for 2018. For married taxpayers filing jointly, the standard deduction rises to $24,000, from $13,000. Seniors age 65 or older retain the extra standard deduction of $1,300 if married or $1,600 if single.
What is the new secure ACT law?
The SECURE Act became law on Dec. 20, 2019. The SECURE Act makes it easier for small business owners to set up “safe harbor” retirement plans that are less expensive and easier to administer. Many part-time workers are eligible to participate in an employer retirement plan.
Do beneficiaries have to take RMD in 2020?
The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, waives required minimum distributions during 2020 for IRAs and retirement plans, including beneficiaries with inherited accounts. This waiver includes RMDs for individuals who turned age 70 ½ in 2019 and took their first RMD in 2020.
Does 2020 inherited IRA require RMD?
1. Do retirees have to take RMDs from retirement accounts in 2020? “No, all RMDs have been suspended for 2020,” says Hayden. This waiver includes any retirement account subject to RMDs, such as IRAs, 401(k)s, Roth 401(k)s and inherited accounts.
Will I have to take my 2020 RMD in 2021?
RMD RULES FOR 2021 AND 2022
For 2021, RMDs will once again be due and will be calculated using the existing life expectancy tables. RMDs for 2021 are calculated as if the 2020 waiver had not occurred. This means that no make-up 2020 RMDs are required for 2021.