New legislation affecting retirement and retirement planning was included as part of fiscal year 2020 spending agreement that was passed by Congress on December 19, 2019 and signed into law on December 20, 2019.
Key provisions affecting annuities include changes to the rules governing Required
Minimum Distributions and inherited, or "stretch," IRAs.
Changes affecting required minimum distributions (RMDs)
As you know, individuals must begin taking RMDs from tax-qualified retirement savings plans, including annuities, when they reach a certain age. Previously, that age was 70½. The SECURE Act raises it to 72 for those born on or after July 1, 1949.
The change was effective January 1, 2020.
Under the new law, people who turn 70½ in 2020 or later won't have to take a distribution until they reach age 72. However, those who turned - or will turn - 70½ by the end of 2019 will still need to take RMDs as currently required. Their first distribution must be taken by April 1, 2020.
Changes affecting inherited IRAs
The SECURE Act also includes changes that limit certain beneficiaries' ability to "stretch" distributions of inherited IRAs.
The changes went into effect
January 1, 2020.
Effective immediately, Americo will no longer issue or accept applications for non-spouse inherited IRAs. We will provide additional guidance as it becomes available.
