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The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law by President Trump on December 20th, 2019. It was done with little fanfare and was probably missed by many due to the holiday season. It is the most extensive retirement act since the Pension Protection Act of 2006. 

This paper is not meant to be a comprehensive analysis of the Act but will focus on the key changes that we believe will impact our clients. 

Required Minimum Distributions (RMDs) now begin at age 72

  • Americans will no longer be required to withdraw assets from retirement accounts subject to RMDs at age 70 ½ 
  • RMDs now begin at age 72 for individuals who turn 70 ½ in 2020 or later 

IRA contributions can be made for workers beyond age 70 ½ 

  • Workers can continue to contribute to traditional IRAs past age 70 ½ if they are still working
  • This change does not apply for tax year 2019, as it will begin for tax year 2020 contributions 

Imposes a 10 yr Rule for non-spouse beneficiaries

  • The new law requires non-spouse beneficiaries to withdraw assets and pay taxes within 10 years. Non-spouse beneficiaries are no longer able to take distributions over their single life expectancy
  • Exceptions to the 10-year rule include assets left to a surviving spouse, a minor child, a disabled or chronically ill beneficiary, and beneficiaries who are less than 10 years younger than the original IRA owner 

529 Funds can now be used to pay down student loan debt, up to $10,000

  • Money remaining in college savings plans can now be used to pay down student debt after the student graduates
  • The new law also allows the 529 plan to be used to pay for certain apprenticeship programs 
Additional provisions may impact retirement savings plans for small business owners.