Money Matters: Retirement account changes start January 1

Last week Congress passed, and by now the president is expected to have signed, the SECURE act, which is the biggest change to retirement account rules in several years.

The changes will take effect January 1 and include several incentives to saving for retirement. A few of the changes to be aware of and prepare to educate your audience on include:

Required minimum distributions start later. Currently, you must begin withdrawing from retirement accounts at age 70 ½, but that age will change to 72.

Allows contributions to traditional IRAs longer. Also increasing from ate 70.5 to 72 is the maximum age to contribute to a traditional IRA.

Beneficiaries (in most cases) must withdraw money from IRAs they inherit within 10 years. This change affects those who will IRA accounts to beneficiaries.

Changes to annuities. Annuities are a sometimes controversial type of insurance and this bill gives new protections to companies that offer annuities, which could mean more annuity offerings.

Provisions to help small businesses offer retirement plans and incentives to offer automatic enrollment. Another of the more controversial provisions in this bill aims to help small businesses offer and encourage participation in retirement savings programs, but policy analysts debate how effective they will be.

Additional changes to IRA contribution and withdrawal rules. Several additional miscellaneous provisions make it easier to contribute to and withdraw money from IRA accounts in some specialized cases.

As with most personal finance policy, the impact of these myriad new rules remains to be seen, but their effectiveness certainly depends on consumers’ awareness of and planning based on the rules.

Weekly Money Matters personal finance content for your newsroom is sponsored by the National Endowment for Financial Education.