While most of us were enjoying the holidays, our friends in Washington were busy tinkering with traditional Individual Retirement Accounts (IRAs).

As you may have heard, Congress passed legislation late last year that changed the rules for traditional IRAs and other defined contribution plans. These changes went into effect on January 1, 2020.

Over the years, there have been many changes to the tax laws affecting retirement, and this one is no different. If you reach age 70½ in 2020, you can delay taking your first required minimum distribution (RMD) on your traditional IRAs until April 1 of the year after you turn 72. If you turned 70½ in 2019, you will still be required to take your first RMD by April 1, 2020. This may not sound like a big deal, but keeping your money in a tax-deferred account for another 18 months may alter some of the retirement income projections you’ve been planning for.

The other thing that’s changed? You can continue contributing to your Traditional IRA past age 70½. There’s no requirement to stop contributing as long as you meet the earned income requirement. 

Of course, your particular situation may warrant some adjustments, so make sure you’re discussing these changes with an advisor.

Please remember that different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this content, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for you or your portfolio. Due to various factors, including changing market conditions, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter (article) serves as the receipt of, or as a substitute for, personalized investment advice from Allos Investment Advisors, LLC

The content of this letter does not constitute a tax or legal opinion. Always consult with a competent professional service provider for advice on tax or legal matters specific to your situation. To the extent that a reader has any questions regarding the applicability of any specific issue discussed in this content, he/she is encouraged to consult with the professional advisor of his/her choosing.  

Published for the blog on February 27, 2020.