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What You Need to Know About the SECURE Act

Recently Congress passed both the SECURE Act and the CARES Act into law.  Although these Acts are comprehensive in aggregate, Ballast Advisors financial professionals have comprised a summary of the sections we want our clients to understand.

If you have questions, please contact your financial advisor.


Required Minimum Distributions (RMDs) to Begin at Age 72

Section 114 of the SECURE Act delays the commencement of Required Minimum Distributions (RMDs) from most retirement accounts until age 72 (from the previous beginning date of age 70 ½.)

  • Retirees will still be able to delay their first RMD until April 1stof the year following the year for which they must make their first RMD. So, a retiree turning age 72 on January 24, 2021 has until April 1st, 2022 to take their first RMD (but will have to take two RMDs during 2022, one for 2021 and one for 2022). 

Qualified Charitable Distributions Still Allowed at Age 70 ½

Even though RMDs don’t begin until age 72 under the SECURE Act, Qualified Charitable Distributions (QCDs) are still allowed beginning at age 70 ½. A QCD allows a taxpayer to distribute amounts directly from their IRA to a charity, and such distribution is not includable in income (up to $100,000). Once the taxpayer reaches age 72, the QCD will be allowed to reduce his or her RMD, just as before.

Traditional IRA Contributions Allowed After Age 70 ½.

Beginning in 2020, anyone—regardless of age—will be allowed to contribute to a Traditional IRA, provided such person has earned income (income from wages or self-employment). So, if a taxpayer is working, or has a spouse who is working, he or she can continue to contribute to a traditional IRA after age 70 ½.

End of the ‘Stretch’ IRA

The end of the ‘stretch’ IRA for most non-spouses. The stretch IRA allowed designated beneficiaries to stretch distributions over their life expectancy after inheriting an IRA. The new law requires the entire inherited IRA to be distributed by the end of the 10th year following the year of inheritance. However, there are no RMDs, so beneficiaries can choose to liquidate the inherited IRA over several years or all at once, if it is emptied by the end of the 10th year.  

  • This new rule applies to both traditional and Roth IRAs. Since Roth IRA distributions are tax-free, waiting until the 10thyear to empty the Roth IRA can be a good strategy.
  • Minor children of the original retirement account owner aren’t subject to the 10-year rule until they reach the age of majority.

Inclusion of Student Loans and Apprenticeships for Qualified Education Expenses From 529 plans

Expenses for Apprenticeship programs are now included in Qualified Higher Education Expenses, provided the program is registered and certified with the Department of Labor.

  • Also, “Qualified Education Loan Repayments” have been included as qualified higher education expenses. Such distributions from a 529 plan used for student loan repayments are limited to a lifetime amount of $10,000.
SourceSetting Every Community Up for Retirement Enhancement Act of 2019 – SECURE 


Ballast reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs. Past performance is not indicative of future results. Nothing contained herein constitutes an offer to buy or sell a particular security or investment strategy. The material presented is derived from a third-party source believed to be reliable, but its accuracy and certainty cannot be guaranteed.

Ballast Advisors, LLC is an independent investment adviser registered under the Investment Advisers Act of 1940, as amended. Registration does not imply a certain level of skill or training. More information about Ballast, including our investment strategies, fees and objectives, can be found in our ADV Part 2 which is available upon request.