On December 20th, 2019 President Donald Trump signed The Secure Act into law creating some great opportunities for retirees in 2020. Now is the time to do these three things for the new year.
Now is a great time to utilize Qualified Charitable Distributions
The Secure Act has changed the age of Required Minimum Distributions (RMDs) from 70 1/2 years of age to 72. However, the minimum age to utilize Qualified Charitable Distributions (QCDs) has NOT changed. So, if you're 70 1/2 years of age, you need to be having conversations with your retirement professional on how to leverage this option and send that money to charity.
Now is a great time to spend your IRA money
The Secure Act ended the ability to use stretch IRAs. The new limit is now 10 years after the death of the original account holder, regardless of the age of the beneficiary. An IRA was never a great way to pass wealth along to the next generation because of the tax implications. With tax brackets being historically low, now can be a great time to actually spend it!
Now is a great time for Roth conversions
If you're not going to spend the money in your IRA, now would be a great time to do some Roth IRA conversions. Not only are tax rates currently low, tax brackets are much bigger than years past - meaning you can take more income without jumping into a larger tax bracket. So, if you are planning to pass along wealth, Roth IRAs are a much better option because your beneficiaries won't pay taxes and Roth IRAs are not subject to RMDs.