January 13, 2020
The Setting Every Community Up for Retirement Enhancement (SECURE) Act was enacted on December 20, 2019 as part of a $1.4 trillion spending package signed by PresidentTrump. This act is considered the one of the most progressive changes to retirement planning in a more than decade since the Pension Protection Act of 2006 was passed.
Investopedia
provides this synopsis of the SECURE Act which is designed to ease the looming retirement savings crisis by:
- Making it easier for small businesses to offer their employees 401(k) plans by providing tax credits and protections on collective Multiple Employer Plans
- Allowing retirement benefits for long-term, part-time employees
- Removing maximum age limits on retirement contributions, formerly capped at age 70½
- Raising the required minimum distribution (RMD) age to 72 from 70½
- Allowing penalty-free withdrawals up to $5,000 from retirement plans for the birth or adoption of a child
- Relaxing rules on employers offering annuities through sponsored retirement plans
- Allowing penalty-free withdrawals of up to $10,000 from 529 education-savings plans for the repayment of certain student loans
- Revising components of the Tax Cuts and Jobs Act (TCJA) of 2017 that raised taxes on benefits received by family members of deceased veterans, as well as students and some Native Americans.
An estimated $15.7 billion needs to be raised to pay for these changes. The Trump Administration plans to pay for the SECURE Act by eliminating the”Stretch IRA” estate-planning strategy. Non-spouse beneficiaries of IRAs where able to spread disbursements from the inherited money over their lifetime. The new limit will be within 10 years of the death of the original account holder.
Feel free to contact any member of our team with questions at 610-828-1900 (PA) or 732-341-3893 (NJ) or me at
[email protected]
. We are always happy to help.
Martin C. McCarthy, CPA, CCIFP
Managing Partner
McCarthy & Company, PC
Disclaimer: This alert is for informational purposes only and does not constitute professional advice. Information contained in this communication is not intended or written to be used as tax advice, and cannot be used by the recipient to avoid penalties that may be imposed under the Internal Revenue Code. We strongly advise you to seek professional assistance with respect to your specific issue(s).
