FAQs About the SECURE Act

Changes that Affect Retirement Planning and Philanthropy

The SECURE (Setting Every Community Up for Retirement Enhancement) Act is one of the most dynamic changes to retirement legislation since the Pension Protection Act of 2006, and addresses a variety of retirement planning topics.

Effective January 1, 2020, the SECURE Act makes changes that may impact your plan to pass wealth to your heirs and to charity. Please consult with your financial advisors to see how the new law affects you. Call Carrie Ogami, Dir. of Gift Planning, at 808.944.5845 for information about using retirement assets to support Punahou.

Frequently Asked Questions

List of 4 frequently asked questions.

What is the purpose of the SECURE Act?

The SECURE Act governs the rules for how we save for retirement and what we may do with our retirement funds. The law is meant to be an incentive, helping Americans increase their retirement savings by creating more flexible rules for saving and using retirement funds.
When do I have to take my RMD under the SECURE Act?

The age for taking a required minimum distribution (RMD) increased to 72 from 70-1/2. This increase gives taxpayers extra time to defer mandatory withdrawals, potentially letting retirement funds grow for an additional 1-1/2 years before tapping into them. That can mean a significant boost to overall retirement savings for many seniors. However, for tax year 2020, RMDs are waived under the CARES (Coronavirus Aid, Relief and Economic Security) Act, passed on March 27, 2020 in response to the COVID-19 outbreak.

You can add funds to a traditional IRA for as long as you live and work. Previously, contributions were cut off at age 70-1/2. The SECURE Act removes this restriction, because Americans are working and living longer.
Can I still make charitable rollover gifts from my IRA?

Yes! The SECURE Act does not affect the law that allows you to make gifts to charity from your traditional IRA beginning at age 70-1/2. This means you can still make a gift directly to charity from your IRA at age 70-1/2 even if you are not yet required to take a minimum distribution.
Does the SECURE Act affect my heirs?

The SECURE Act eliminates the "stretch" IRA that allowed non-spouse IRA beneficiaries to stretch out RMDs from an inherited account over their lifetime. Instead, the new law requires them to withdraw all the funds from an inherited IRA within 10 years, triggering an obligation to pay income tax on the withdrawals sooner and potentially reducing the value of the IRA by up to 50%. (There are some exceptions for minors, disabled, chronically ill or those not more than 10 years younger than the deceased IRA owner.)

You can minimize the tax consequences on IRA distributions to non-spouse beneficiaries with giving options at Punahou that can create a long-term income stream for your heirs while also benefitting Punahou. Interested? Please call 808.944.5845 to learn more about our gift planning options.