GREENSBORO, N.C. — We are going to see big changes to our money in 2020. Local professional Scott Braddock from Scott Braddock Financial is here to go through the way your finances could be impacted in the new year.

The SECURE Act 

The SECURE Act will impact anyone with an IRA or 401(k). This is the first major law impacting retirement savers in more than a decade. The new law includes dozens of major changes: 

-Contributions to your traditional IRA can be made at any age
-Those who inherit a retirement account, like an IRA, will be required to withdraw the money within 10 years
-Required minimum distributions, or RMDs, will be required at age 72 instead of age 70 ½.

Like anything, there are pros and cons to the SECURE Act, and it’s important we understand these potential changes and how they might impact our retirement.

New Tax Forms

The W-4 form has a whole new look! This is the form that tells your employer how much money to withhold for federal income taxes. The form is divided into five steps, but only step one and step five are required for all employees. If you have already submitted a W-4 form prior to 2020, you are not required to fill out a new form. The IRS released a calculator to help you determine your withholding. You can find it on Scott's website. Be sure to talk with your tax professional if you have questions.

Standard Deduction Changes

The standard deduction for the 2020 tax year is changing. When you file your taxes in April 2021, these are the numbers you need to know:

-The standard deduction for individuals has increased to $12,400 and $24,800 for married couples filing jointly.
-The child tax credit has also increased to $2,000 per qualifying child.
-If you have any changes happening in 2020, like getting married, starting a business or having a baby, you will want to use these updated numbers to estimate your tax liability.

Increased Contribution Limits

If one of your New Year’s Resolutions is saving more for retirement, you’re in luck! You can now save up to $19,500 in your 401(k). If you’re over the age of 50, you have the opportunity to contribute an additional $6,500. Try to stretch yourself and save as much as you can to put yourself in the best position for retirement.

Social Security Increase

Social Security benefits will increase by 1.6% on January 1, which averages out to $24 per month. Also, the Full Retirement Age climbs by two months to 66 years and eight months. Remember, you can claim Social Security benefits at the age of 62, but you will not receive 100% of your benefit until you hit your full retirement age. If you aren’t sure what your full retirement age is, it is based on the year you were born. You can find a chart on Scott's website.