FOX 2 - Good news for new moms and dads, the feds made changes to help your wallet - but other changes they made to your retirement will have you crunching numbers.
If you have a 401(K) or an IRA, things are changing. Changes that the feds call the secure act. It kicked in January 1st and it affects the withdrawals we're required to take in retirement.
"This is a significant change and it is primarily because people are living longer so we want to make sure that people aren't going to out-live their money by being forced to take money earlier than should be taken," said Kirk Cassidy.
Cassidy, a financial planning advisor, is talking about something called a required minimum distribution. It's the minimum amount you have to take from your retirement savings account every year in retirement. That's about to change.
Right now, retirees have to take their required minimum distributions from their retirement accounts at age 70 and a half. The SECURE Act raises that age to 72.
"We're seeing a lot more of our seniors working into their 70s which were this was an issue," Cassidy said. "They were working in their 70s and still required to take an RMD but now this gives them an opportunity to continue working into their 70s and for taking their RMD's until they are 72."
And then another change is how your family, outside of spouses, can access money you leave them. The new SECURE Act requires heirs to withdraw all the money from an inherited IRA within 10 years following the owner's death.
"If you were a non-spouse then you can inherit this money and take it over your lifetime and take a distribution, a little bit increasing every year based on your own life expectancy over your lifetime," Cassidy said. "Now, it is everything must come out in 10 years."
And finally new parents, listen up. The SECURE Act affects you too.
"If you have a child, they will allow you to take $5,000 out and not pay a penalty on it," Cassidy said. "It is good; it gives greater liquidity."
Liquidity means extra cash. Bottom line for your bottom line, Uncle Sam has made changes that will likely affect you so get educated to see how it'll hit your pocket book.
Financial analyst Kirk Cassidy