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SECURE Act Increases Age for Required Minimum Distributions

by Kelly Gillette
January 16, 2020

New tax legislation, known as the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE Act), was signed into law on December 20, 2019. The new law changes the age at which minimum distributions are required.

Participants in a qualified plan, such as a 401(k), and owners of traditional IRAs are generally required to begin taking distributions at age 70½, though they may defer the distribution for the year in which they reach age 70½ until April 1 of the following year. There is an exception for an employee participating in a qualified plan like a 401(k) who is not a 5% owner of the company. In that case, the employee may defer withdrawals until retirement from the company.

The SECURE Act increases the required minimum distribution age from 70½ to 72 for those who reach 70½ after December 31, 2019. In other words, if a person turned 70½ in 2019, the SECURE Act does NOT apply, and they must continue taking required minimum distributions under the pre-SECURE Act rules.

January 16, 2020

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