Required minimum distributions from traditional retirement accounts have been extended from age 70.5 to 72. That means savers can delay paying taxes on their retirement savings for another 18 months. This change takes affect January 1, 2020.
Savers can contribute to their IRAs past age 70.5 as long as they have an income under the new rules. This was previously prohibited.
Beginning January 1st, if you inherit an IRA you will have to distribute the funds and pay taxes on those funds within ten years. If you have already inherited an IRA you don’t need to worry as the the old rules will still apply.
The new legislation is making it easier for small businesses to offer retirement plans to their employees. The new law permits business of any type to join together to achieve economies of scale that make offering a 401k feasible. And if one company in the 401k cohort decides not to follow the rules, only that company will be punished.
The law also includes a requirement for employers who offer 401ks to allow access to part time workers who work at least 500 hours per year for three consecutive years or 1000 hours per year.
