You may have recently heard us on the radio discussing legislation that would affect the way all Americans plan for retirement. The Setting Every Community Up for Retirement Enhancement Act, better known as the SECURE Act, was signed into law on Friday, Dec. 20. 

There are major changes that will influence the way you plan for retirement going forward. These changes went into effect on Jan. 1. 

Here is a summary of the major changes created by the new law.

Required Minimum Distributions Will Start at Age 72, not 70½

Starting Jan. 1, you will need to start withdrawing money from your traditional IRA at age 72, a change from the current withdrawal requirement of age 70 1/2.

If you turn 70 1/2 in 2019, you will still need to take your RMD for 2019 no later than April 1, 2020. If you are currently receiving RMDs (or should be) because you are over age 70 1/2, you must continue taking these RMDs. Only those who will turn 70 1/2 in 2020 or later may wait until age 72 to begin taking required distributions.

You Can Contribute to a Traditional IRA After Age 70 1/2

The new law will allow you to contribute to your traditional IRA in the year you turn 70 1/2 and beyond, provided you have earned income. You still may not make 2019 (prior year) traditional IRA contributions if you are over 70 1/2.

Inherited Retirement Accounts (STRETCH IRA)

Upon death of the account owner, distributions to non-spouse beneficiaries must be made within 10 years. There are exceptions for spouses, disabled individuals and individuals not more than 10 years younger than the account owner. Minor children who are beneficiaries of IRA accounts also have a special exception to the 10-year rule, but only until they reach the age of majority. This will create additional tax planning needed for inherited IRAs.

Adoption/Birth Expenses

The new law allows penalty-free withdrawals from retirement plans for birth or adoption expenses, up to certain limits.

There are many more aspects and provisions to the new law.