New Retirement Legislation

In May, the House of Representatives passed a bill that would change the retirement plan landscape for many Americans. The Senate is considering a similar bill and many analysts are expecting it to pass.

One of the biggest changes that this bill would implement is the required begin date. The begin date is  the age at which you are required to begin making withdrawals from your retirement accounts. The proposed change would raise the age from 70 ½ to 72. This would mean that retirees who do not need to access their savings for income, could delay their required minimum distributions by

Under the proposed bill, the rules governing required minimum distributions from inherited retirement accounts would also change. The new bill would require inherited IRAs to be liquidated over a ten-year period. Under the current system, inherited IRAs can be liquidated over the lifetime of the successor . This means that withdrawals will be in a larger amount over a shorter time frame.

The proposed bill also expands the access to retirement accounts before retirement. Specifically, it would allow for penalty free distributions before age 59 ½ from retirement accounts up to $5,000 to help assuage expenses related to having a child, within the first year of the child being born.

While this bill is not law yet, a version is expected to be signed into law by the end of the year. If you would like to read more about the specifics of what is being proposed, we recommend these two articles that provide a helpful overview:

https://www.cnbc.com/2019/05/24/what-the-secure-act-would-mean-for-you.html

https://www.bankrate.com/retirement/how-secure-act-could-impact-retirement-savings/

A link to the bill can be found here: https://www.congress.gov/bill/116th-congress/house-bill/1994

There is no guarantee that any investment strategy, including those described here, will be successful. Any investment or investment strategy can lose money. Past performance does not guarantee or predict future results. You should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Raffa Wealth Management, LLC. This information was gathered from reliable sources but we cannot guarantee accuracy. Indexes do not reflect the fees associated with actual investments and such fees would reduce the performance illustrated.
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