The SECURE Act (short for Setting Every Community Up for Retirement Enhancement Act) was signed into law by President Trump. It went into effect on Jan. 1.
- Required minimum distributions must now begin at age 72, up from 70½. (This doesn’t apply to those already age 70½.)
- If you’re still working at age 70, you can continue contributing to an Individual Retirement Account
- It’s now easier and cheaper for small employers to offer retirement plans. So if you work for a small company without a 401(k) plan, your employer might create one in 2020.
- Part-time workers will now be able to participate in their employer’s retirement plan.
- Companies will be able to auto-enroll new employees into a 401(k) plan with contribution rates up to 15 percent of salary (up from 10 percent previously).
- Parents under age 59½ who give birth or adopt a child can withdraw up to $5,000 from their retirement accounts without paying a 10 percent IRS penalty. (Taxes will still be due on the withdrawal.)
- Children who inherit IRAs from a parent must now take all distributions within 10 years, instead of over the heir’s lifetime.
All this means you have new opportunities to improve your retirement planning.
- What is the SECURE Act and how could it affect your retirement? —Investopedia
- Understanding the SECURE Act — by Eric Tashlein, Milford-Orange Times
Ric Edelman is host of The Ric Edelman radio program.
@ 2020 Edelman Financial Engines, LLC. Financial Engines® and Edelman Financial EnginesTM are trademarks of Edelman Financial Engines, LLC. All advisory services offered through Financial Engines Advisors L.L.C. (FEA), a federally registered investment advisor and wholly owned subsidiary of Edelman Financial Engines, LLC. FEA may also be referred to as Edelman Financial Engines or Financial Engines. Results are not guaranteed. AM1050131
This material was prepared for informational and/or educational purposes only. Neither Financial Engines Advisors L.L.C (also referred to as Edelman Financial Engines) nor its affiliates offer tax or legal advice. Be sure to consult with a qualified tax or legal professional regarding the best options for your particular circumstances.
Edelman Financial Engines, LLC – 4000 Legato Road, 9th Floor, Fairfax, VA 22033-4055 – (888) 752-6742.