How the Newly Implemented SECURE Act Affects You

by corrigankrause
Photo from behind an old couple, linking arms, walking through an open field

The recently passed appropriations bill includes the long-awaited SECURE (Setting Every Community Up for Retirement Enhancement) Act and other retirement-related rules. This act went into law on January 1, 2020.  This is the most significant change in retirement plan rules since 2006. 

Here is a summary of the major components:

  • The minimum distribution age increased from 70 ½ to 72
  • No more stretch IRAs, beneficiaries must withdraw all assets of an inherited account within 10 years
  • Ease of burden for multiple employer plans
  • Employer plans would also be able to enroll long-term part-time workers. Rather than 1,000 hours every year to be eligible, eligibility changed to 1,000 hours per year or three consecutive years of at least 500 hours
  • Auto-enrollment encouragement – a tax credit up to $500 will be available to employers who automatically enroll workers into their retirement plans
  • Offers more options for lifetime income strategies, such as annuities within retirement plans
  • Qualified birth or adoption distribution of up to $5,000 from a defined contribution plan will be allowed without paying the 10% penalty
  • 529 funds can now be used to pay down student loan debt, up to $10,000
  • A 529 plan may also be used to pay for certain apprenticeship programs

Please email for further discussion.