Know Your IRA

IRAs are supposed to be for saving for retirement but in challenging economic times like these many individuals may be forced to take distributions before retirement age. Be careful! If you tap your IRA before reaching age 59 ½, the bad news is that you run the risk of being hit with the 10% early distribution penalty. The good news is that there are some exceptions to this penalty. You IRA distribution will still most likely be fully taxable, but you can spare yourself the additional 10% penalty if one of these exceptions apply to you.

Over 40 million Americans have filed for unemployment since March. With job loss can come questions of what to do with retirement savings such as your 401(k) plan. A rollover to an IRA may be a good move for you.

Like most people’s lives, the retirement world is upside down. This is made evident by a single statement: “Required minimum distributions (RMDs) can be rolled over.”

For those who inherit IRA accounts in 2020 or later, the SECURE Act permits five groups of people to stretch required minimum distribution (RMD) payments over their life expectancy.

With the clock ticking down on 2019, Congress is expected to enact a $1.4 trillion year-end spending bill to keep the government running. Tucked away inside this mammoth piece of legislation is the the SECURE Act, set to become effective January 1, 2020. This new law includes significant changes to retirement accounts.

IRAs are for saving for retirement. However, as these accounts have grown over the years, many IRA owners still have significant funds in their IRA at their death. This means that estate planning for IRAs is essential.