On December 20, 2019 the President signed a new budget bill into law. Here is a summary of the major items that may impact you especially if you are near the age of 70 or have a 529 plan. We are awaiting further details and guidance from the IRS, but below is a list of the major issues:
{AUDIO} New for 2020: Changes to RMDs and 529 Plans
Retirement Planning
- Starting in 2020 anyone of any age may now deposit money to an IRA if they have earned income such as a wage or self-employment. There are some other rules that may apply, but the old rule prohibiting deposits during or after the year turning 70 and ½ has been repealed.
- Beginning in 2020 the mandatory age to begin distributions from your IRA has been raised to 72 from the old, confusing age 70 and ½.
College Savings
- You may now withdraw up to $10,000 total during your lifetime from a 529 plan to repay student loans of the account beneficiary (or their siblings), without tax or penalty, as a qualified educational expense.
If you have any questions or concerns, please, feel free to contact me at 320.222.4236 or email directly at [email protected].