2023 Retirement Law Changes

The SECURE Act, Section 113 added permitted distributions not exceeding $5,000 for any eligible birth or adoption.[1] Section 114 increased the age for mandatory distributions from 70 ¼ to age 72.[2] Section 401 modified required distribution rules for designated beneficiaries. Specifically, I.R.C. Section 401(a)(9) was modified to require most non-spousal beneficiaries of an inherited IRA to fully withdraw all assets form the account within 10 years of the account owner’s death.[3] Only an “eligible designated beneficiary” (“EDB”) may accrue benefits over his or her lifetime.[4] An EDB must be a spouse, disabled/chronically ill beneficiary, minor child, or not-more-than 10 years younger than the participant.[5]

[1] 26 U.S.C.A. § 72 (defining distribution for an “eligible birth or adoption” as a distribution from an eligible retirement plan to an individual during their first year of life). [2] 26 U.S.C.A. §§ 401, 408. [3] 26 U.S.C.A. § 401(a)(9)(H). [4]Id. at § 401(a)(9)(H)(ii). [5]See, e.g., Natalie Choate, Retirement Benefits in Post-SECURE World, at ¶1501.2 (Nov. 2021).