The new secure act has some tax benefits for families who have children with student loan debt and for growing families. It would allow 529 accounts to qualify for student loan repayment of $10,000 a year. If parents have funds remaining in educational savings loans accounts they can now help their graduated child by paying up to $10,000 a year in their student loan debt. Also the new law would allow for a penalty-free withdrawal of up to $5,000 for your 401(k) to help with the cost of having a child or adopting a child. For more information click here.
Starting in 2020, a new law takes into effect that will help expand opportunities for individuals to increase retirement savings. There is no longer a restriction to the age limit that contributions can be made into a traditional IRA. After reaching age 70 ½, you can make qualified charitable contributions of up to $100,000 per year directly from your IRA. As of 2020, the new minimum age for distributions from IRAs and retirement plans is now 72. The exception to this is if you are still working as an employee and do not own over 5% of the outfit that employs you, then you can postpone distributions until you retire. For more information click here.
The new Secure Act that takes into effect starting 2020 will allow for more individuals to qualify for 401(k) plans and will make things easier for employers. The new law will allow an increase from 10% of wages to 15% of wages in which they can automatically enroll workers in “safe harbor.” The new law will also give employers a $500 maximum tax credit if they create a 401(k) or Simple IRA with automatic enrollment. Part-time employees who work 1000 hours a year or have 3 years of 500 hours of service are now eligible to enroll in retirement plans from their employers. The Secure Act also allows employers to offer annuities as investment options withing 401(k) plans (the fear of legal liability if the annuity provider fails is now […]
Under the new Secure Act, sticker laws are in place for post-death minimum distributions starting in 2020. Before the required minimum distribution(RMD) rules allowed non-spouse beneficiary’s to stretch out the distributions from an Inherited IRA. The new law changes the way RMD’s are taken if the owner died after 2019. The beneficiary must drain the inherited accounts within 10 years after the account owner’s death. This rule does not apply if you are an eligible designated beneficiary. To classify as an eligible designated beneficiary: (1) you are the surviving spouse of the account holder, (2) a minor child of the deceased account holder, (3) a beneficiary who is no more than 10 years younger than the deceased account owner, or (4) a chronically-ill individual. For more information click here.