Apr 1

Apr 1 Beneficent Times

Everything You Care About Regarding The SECURE Act

The Setting Every Community Up for Retirement Enhancement (SECURE) Act is the most dynamic change to retirement legislation since the Pension Protection Act of 2006. Given that many of these changes became effective on January 1, 2020, there are a few key areas that may immediately affect your retirement plan.

The SECURE Act

REQUIRED MINIMUM DISTRIBUTIONS (RMDs) WILL START AT AGE 72, NOT AGE 70 ½

Starting January 1, 2020, you will need to begin withdrawing money from your traditional IRAs and employer tax-deferred accounts such as 401(k)s, 403(b)s, and 457s at age 72, a change from the current withdrawal requirement of age 701/2.
If you turned age 70 ½ in 2019 (born before July 1, 1949), you would still need to take your RMD for 2019 no later than April 1, 2020. If you are currently receiving RMDs (or should be) because you are over age 70 ½, you must continue taking these RMDs. Only those who will turn 70 ½ (born on or after July 1, 1949) in 2020 or later may wait until age 72 to begin taking required distributions.

YOU CAN CONTRIBUTE TO YOUR TRADITIONAL IRA AFTER AGE 701/2

At the start of 2020's tax year, the new law will allow you to contribute to your traditional IRA in the year you turn 70 ½ and beyond, provided you have earned income. You still may not make 2019 (prior year) traditional IRA contributions if you are over 70 ½.

INHERITED RETIREMENT ACCOUNTS

Upon the death of the account owner, distributions to non-spouse individual beneficiaries must be made within 10 years. The current rules that allowed a non-spouse IRA beneficiary to "stretch" required minimum distributions (RMDs) from an inherited account over their lifetime (and potentially allow the funds to grow tax-deferred for decades) have been eliminated. The rule applies to inherited funds in a 401(k) account or other defined contribution plan as well.
There are exceptions for spouses, disabled individuals, and individuals not more than 10 years younger than the account owner. Minor children who are beneficiaries of IRA accounts also have a special exception to the 10-year rule, but only until they reach the age of majority.
If you've already inherited a stretch IRA, rest easy. The changes from the bill that close loopholes that allowed stretch IRAs apply to beneficiaries of someone who dies after the end of 2019.

Though there are many more aspects and provisions to the new law, we have highlighted some of the most pertinent. If you have questions or concerns, please call us at (626) 795-7210 for a Strategy Visit.

Health Tips for the Quarter:

The World Health Organization Recommends following these three simple steps to ensure public and personal safety.

Client Referral Rewards Program

“It’s a Jungle Out There”!

We were very excited to host our annual Referral Rewards event this year at Malibu Wine Safaris.
This open-air tour of Saddle Rock Ranch & Vineyards included a meet and greet with such exotic animals as yaks, llamas, zebras, water buffaloes, and the star of the show, Stanley, the giraffe. We hope you’ll consider participating in our next exciting Referral Rewards event.

At Beneficent Financial, we dare to be different in the financial world. We are advocates, and our goal is to lead you out of the economic mystery into financial freedom. We were very excited to host our annual Referral Rewards event next year as a Murder Mystery.