On January 1, 2020, the Setting Every Community Up for Retirement Enhancement (SECURE) Act took effect, which resulted in a number of changes for retirement accounts, including the following:

Required minimum distribution (RMD) changes
The SECURE Act increases the age at which people must begin taking RMDs from their retirement accounts from 70½ to 72. If you did not turn 70 ½ on or before December 31, 2019, you will not have to begin taking your RMDs until age 72. 

Note: This does NOT change the age at which an individual may make a tax-advantaged charitable gift (a qualified charitable distribution) from an IRA. That age is still 70½.  

Changes to withdrawal options for non-spouse IRA beneficiaries
Under the previous law, when an IRA owner died the IRA beneficiary typically could “stretch” distributions over their lifetime. This enabled IRA beneficiaries to defer the income tax on an inherited account (other than the tax due on annual RMDs) throughout their lifetimes.

The SECURE Act modified the stretch IRA provisions. Under the new law:

• Spouses may still stretch payments over their lifetimes.
• Non-spouse beneficiaries must withdraw all the money in the IRA within 10 years of the account owner’s death (with several exceptions).

Please consult a professional advisor to learn how these and other provisions of the SECURE Act may affect you. 

For questions, or to learn more about tax advantaged charitable giving options, contact the University of Minnesota Foundation Planned Giving staff at [email protected] or 612-624-3333.

Important notice regarding change to Fidelity retirement plans
In addition to reviewing your investments during the transition from Securian to Fidelity, it is important to review and update your beneficiary designations. While some designations may transfer from former accounts, there are some circumstances where they will not; for example, when accounts are merged or required information is missing.

Please review and update your retirement account beneficiary designations during the Early Choice Window (until March 20) and again after the transfer to make sure the designations match your wishes.

—Lynn Praska, senior planned giving officer, UMF