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How the New SECURE Act Affects Your Retirement
The SECURE Act, which stands for "Setting Every Community Up for Retirement Enhancement" became law in 2019 and applies to all retirement accounts including Roth IRAs. Its purpose is to expand the pool of people who can save for retirement via a tax-free or tax-deferred workplace plan.

According to The Pew Charitable Trusts, more than one of every four private sector workers are not offered the opportunity for a retirement plan such as a 401(k). The SECURE Act changes this.

Friendly Changes

1.   Contributions to IRAs uncapped
  • Now, your contribution to a traditional IRA is allowed at any age. Prior to the act, the age limit was 70 ½.

2.   Expansion on the concept of compensation
  • Stipends and non-tuition fellowship payments can be counted as compensation (earned income) for the purposes of making (traditional or Roth) IRA contributions.
  • Home healthcare workers can contribute to a retirement plan or IRA based on compensation (so-called “difficulty of care” payments) that is tax-exempt. 

3.   Delay RMDs
  • Your Required Minimum Distribution (RMD) can now begin at age 72 instead of 70½. It applies to people who turn 70½ in 2020 or later. The individual who turned 70½ in December 2019 will still be required to take RMDs in 2020. 

4.   Qualified birth or adoption distribution 
  • A new exception to penalty free distributions up to $5,000 from an IRA or employer plan is available for an adoption. To qualify, the account owner must take a distribution during the one-year period beginning on their (1) date of birth or (2) date on which the adoption is finalized. The adopted individual must be under age 18. The provision allows the individual who took the distribution to pay it back to the plan or IRA at a later date.

5.   Delayed adoption of a qualified retirement plan
  • A new plan can be treated as in effect the prior tax year even if it is established later than the due date of the prior year’s tax return. It can apply to plans that are entirely employer funded, such as profit sharing, pension, and stock bonus plans. 

6.   For small employers
  • Multiple Employer Plans (MEPs). Employers of all sizes can band together to create open MEPs, referred to as “Pooled Plans.”
  • Increased tax credit. The tax credit for small employers who start a new retirement plan will increase to $5,000 from $500. Small employers who add automatic enrollment to their plans also may be eligible for an additional $500 tax credit per year for up to three years.

7.   Part-time employee eligibility for 401(k) Plans
  • Employees who work at least 500 hours during each of three consecutive 12-month periods are allowed to make deferral contributions. 

There are many more provisions in the SECURE Act, particularly in the areas of a 401(k). For example, annuities are now permitted in 401(k) plans. Also, the SECURE Act increases penalties for failure to file.

There are more significant changes in the SECURE Act, such as the notion of an eligible qualified beneficiary and the replacement of an inherited IRA to one with a ten year payoff period. We will discuss that in the next newsletter.

The Act may mean a new strategy, or at least an adjustment, for your retirement plan. If you would like assistance with this or have any questions, please don't hesitate to contact us.

Our Next Webinars

These will be held online until we return to normal, including in June:
Seven Tips for a Peaceful Retirement

Thursday July 9, 2020
10:00 am - 11:00 am

Learn about the signs of Alzheimer's or diminished capacity and the steps to take to ensure the best life possible for your loved ones and family members.

Estate Planning in Plain English:
Why it's Critical to Your Loved Ones

Saturday, July 11, 2020
10:00 am - 11:00 am

Learn how to avoid family clashes, court battles and undue taxes! Control how your assets will be preserved and distributed. Protect your wealth and your retirement.

You may also contact Lauren at (703) 448-6121 or via email to register for these webinars.
Personal and Professional Notes
How to Enter a Webinar
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Meet Our Team
Miorini Law hopes to see you at our webinars, but if you would like to get to know our staff before that, please click on the photo to learn about the people who work to help secure the future of you and your family. When you come to visit us, we also work to ensure your safety!
Meet Our Interns
Savita Keidel is a senior at Phillips Exeter Academy in Exeter, NH. She is athletic and musical, playing on the varsity soccer and lacrosse teams, and mastering the piano, math and chemistry! Outside of class she is a member of the yearbook club. Savi, who works remotely, cherishes the experience of working in the private sector and particularly in a law firm!
We also welcome our new Administrative Assistant, Maya Khachab, to Miorini Law. Maya works remotely, constantly demonstrating her patience by keeping our contact database in order! She speaks Arabic and French and will be a high school senior in the fall. In the future, she is interested in majoring in Political Science or Business Management.