We know that many people enjoy the HealthWatch segments, and don’t worry, they’ll be back next quarter. This quarter, however, we had a unique opportunity to update you about the SECURE Act, which stands for Setting Every Community Up for Retirement Enhancement,’ and was signed into law by President Trump on December 20th.
There are 29 provisions to the new law, but here are the top five, which we think are most likely to affect people.
- The Act changes the age for Required Minimum Distributions from 70½ to 72, which will allow additional time for IRAs to grow.
- Allows contributions to traditional IRAs after age 70½, which will help people who want to work longer to continue to contribute to their IRA. Coupled with number one, these can both help you grow your money for longer.
- The Act also allows for expanded benefits for part-time employees, and means that long-term part time employees may now be eligible for employer qualified plans like 401(k) plans.
- It also allows 529 plans to be used to pay off student debt – up to $10,000 per beneficiary.
- In most instances, it eliminates so called ‘stretch’ IRAs with non-spouse beneficiaries like kids and grandkids. In the past, it was possible to stretch an IRA out over the lifetime of the recipient. Now, in most cases, it can only be stretched out over 10 years, but there are some exceptions.
These are just 5 of the provisions in the new law, most of which take affect for tax year 2020 or later. But, as you can see, they will affect most of us in some way. As you meet with your advisor in the coming year, we’ll be talking to you further about this new and important piece of legislation, and working hand in hand with you to make the most of these new provisions.
