With the new year has come new laws for donors to consider as they develop financial and charitable giving plans to best meet their needs. One such law is the Setting Every Community Up for Retirement Enhancement (SECURE) Act which was signed into law in December 2019.
Provisions of the SECURE Act generally went into effect on January 1, 2020 and we’re pleased to share some of the provisions* that are part of this new law.
- Qualified Charitable Distributions (QCDs) – While the age for a Required Minimum Distribution (RMDs from IRAs) increases to 72, the qualified charitable distribution (QCD) age remains at 70½. IRA owners over age 70½ may transfer up to $100,000 each year to qualified charities. This transfer may fulfill part or all of an RMD.
- Traditional IRA Contributions – Individuals over age 70½ with earned income may continue to make contributions each year. Previously, only Roth IRAs could be funded after age 70½. All IRAs may now be funded at any age, provided you have earned income.
- Required Minimum Distribution (RMD) Age – For individuals who turn 70½ after December 31, 2019, the RMD age of 70½ is increased to age 72. Those who reached age 70½ during 2019 must still start their RMDs under the previous law.
- Retirement Plan Annuities – The rules are generally expanded to permit more qualified retirement plans to offer annuity payout options. Section 204 of the Act generally limits the liability of employers who offer annuity options in their retirement plans.
- Stretch Distribution Reduced – Inherited IRAs for non-spouse beneficiaries will no longer be distributed over life expectancy, but IRA and other qualified plans of decedents must be paid out over a maximum term of ten years. There are exceptions for recipients with disabilities, minors and individuals who are within 10 years of the age of the IRA owner.
It’s important to note that United Way Suncoast is not an expert on these new SECURE Act provisions and we encourage you to contact your financial advisor to learn more about the changes included as part of the SECURE Act and how those changes might affect you.
As always, United Way Suncoast is grateful for your support and we welcome inquiries from donors who are considering ways to include United Way Suncoast in their estate plans. For information related to bequests, IRA Rollovers, gift annuities or to learn more about United Way Suncoast’s Planned Giving program, please contact:
Senior Director, Major Gifts and Planned Giving
*SECURE Act provisions excerpts provided by Crescendo Interactive, Inc.