Do you have an IRA or 401(k)? If so, you’ll be interested in some legislation Congress has just passed.

For starters, you now have until age 72, rather than 70 ½, before you must start taking withdrawals from your traditional IRA and 401(k). With this higher age limit, you can keep your account potentially growing longer on a tax-deferred basis. However, if you do wait until 72, your required withdrawals might be larger, and these withdrawals are usually taxable.

You can also contribute to your traditional IRA for as long as you have earned income, instead of stopping at 70 ½, under the old rules.

Here’s another change: You can withdraw up to $5,000 penalty-free from your IRA or 401(k) if you take the money within one year of a child being born or an adoption becoming final. Before the new legislation was passed, you’d pay a 10 percent tax penalty if you made this withdrawal before you reached 59 ½.

Keep the new rules in mind when creating your retirement strategies. The more you know, the better prepared you can be to make the appropriate moves for you.

If you have any questions please contact me at 980-859-2549 or by e-mail at Brandon.Monette@edwardjones.com

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.