SRF CLIENT ALERT: Major Changes for Your IRA Account

Congress has made major changes for IRA accounts effective January 1, 2020:

The End of the Stretch IRA

Before 2020, anyone who inherited an IRA account was able to delay taking distributions from it over the course of his or her lifetime.  This frequently enabled the IRA beneficiary to stretch out the mandatory withdrawals over many decades, meanwhile allowing the IRA account to build up on a tax-deferred basis.  Beginning in 2020, with certain exceptions, anyone who inherits an IRA will have to take all of it out within 10 years.  The timing of the withdrawals during the 10 years is up to the beneficiary, but by the end of 10 years the entire account has to be taken down and all of the deferred income taxes have to be paid.

The major exception is for the decedent’s husband or wife, who is still able to defer withdrawals over the course of his or her lifetime.  The other exceptions are a minor child, a disabled or chronically ill person, or a beneficiary who is less than 10 years younger than the decedent.

Other Significant IRA Changes

Instead of being required to begin withdrawals from an IRA at age 70½, the IRA holder can defer taking distributions until he or she reaches age 72.

Previously, contributions to an IRA account could only be made by individuals who are not yet 70½.  This restriction has been eliminated and there is no longer an age limit on making IRA contributions.

For more information on these changes, please get in touch with Robert Birnbaum at You can also call our office at (212) 930-9700 to speak with our attorneys.


Robert Birnbaum
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