Page 16 THE EVERETT ADVOCATE – Friday, January 3, 2020 The E Club of Everett announces annual meeting Jan. 7 T he Executive Director of The “E” Club of Everett, Vincent J. Ragucci, Jr., invites all current members of the organization to the annual meeting at 6 p.m. on Tuesday, January 7 in the Zion Baptist Church (757 Broadway). The E Club urges potential new members to join the club prior to the meeting in order to participate. New members may join the club or get further information about C Executive Director Vincent J. Ragucci, Jr. The E Club by contacting its Treasurer, James Agnetta, at 617-331-0957. THE SECURE ACT ongress enacted The SECURE ACT (Setting Every Community Up for Retirement Enhancement) on December 20, 2019. The SECURE ACT pushes out the required beginning date to take required minimum distributions from your IRA account or 401(k) account from April 1st following the year in which you reach age 70 ½ to April 1st following the year in which you reach age 72. Non 5% owners still working do not have to take distributions from their 401(k) plan even if he or she has reached the age of 72. With the passage of the SECURE ACT, IRA contributions are now permitted by taxpayers who have reached age 70 ½. Under the old rule, even though many taxpayers were still gainfully employed at age 70 1/2, the law prohibited them from contributing to an IRA account. You still need earned income in order to contribute to an IRA. Part time workers are now eligible to participate in their employer’s 401(k) plan so long as they have worked at least 500 hours per year for at least 3 consecutive years and have attained the age of 21 at the end of that 3- year period. For the first time, if a taxpayer either had a new baby during the tax year or is adopting a child, the 401(k) participant or IRA owner is now allowed to withdraw up to $5,000 within one year following the birth or adoption of a child without paying any 10% early withdrawal penalty for not being age 59 ½. Income taxes would of course still be due on the withdrawal. There has also been a change to the required minimum distribution rules with respect to designated beneficiaries other than a spouse, a minor beneficiary, a disabled or chronically ill beneficiary, beneficiaries with special needs or a beneficiary within ten years of age of the IRA owner. Under the SECURE ACT, with respect to 401(k) and IRA account owners who die after 12-31-19, a designated beneficiary must now withdraw the entire account balance no later than 10 years after the death of the account owner. This effectively eliminates the “stretch” IRA planning tool which would allow beneficiaries to stretch out the distributions over his or her life expectancy. This is a huge change as a 35 yearold son or daughter inheriting an IRA from a parent under the old law would have over 50 years to withdraw the balance of the 401(k) or IRA account. That would have reduced the annual required minimum distribution substantially. On a $500,000 IRA, instead of withdrawing $10,000 per year in taxable income, the son or daughter would now have to withdraw $50,000 per year in taxable income. The SECURE ACT also applies to Roth IRA’s. There will much more to come following the passage of THE SECURE ACT.
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