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2020 Changes Laws for IRAs

On Behalf of | Jan 7, 2020 | News & Press Releases

Effective in 2020, there are changes that apply to a qualified retirement account such as IRA or 401k. Designated beneficiaries will be required to distribute the qualified retirement account in 10 years instead of over a lifetime.

Sharon Ravenscroft suggests to her clients to consider naming more designated beneficiaries for a large IRA or other qualified retirement accounts. Then, each beneficiary would have a smaller amount to distribute over 10 years and could very well pay a lower tax rate on the distribution. Listing adult grandchildren along with children as beneficiaries would provide smaller accounts to be taxed to each beneficiary. Remember not to list a minor beneficiary on a qualified retirement account, because if the minor is to receive more than $10,000, a court conservatorship is required and that is costly.

Another change is the increase in the age of having to take required minimum distributions from 70 1/2 to 72.

Also, those over the age of 70 1/2 can continue to make contributions to an IRA from continued employment compensation.


The Cavanagh Law Firm, P.A.
13250 N. Del Webb Blvd., Suite B
Sun City, Arizona 85351
Telephone: 602-922-6378

Website: www.sharonravenscroft.com

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Phoenix: 602-922-6378

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