At the end of December Congress passed into law the SECURE Act and the implications have a significant impact on retirement.  We are keeping up on the new legislation and doing our research so we can assist you with taking advantage of the changes; as there will be new strategies for optimizing retirement savings and distributions. Please see the article below on the top 10 changes that might affect you.

If you'd like to read a complete summary detailing the new provisions of the SECURE Act, please click here.

Do you have questions about the new legislation and how it might affect you?  We're always here to help, so please reach out!

Please note: we did some revisions to our mailing list and added quite a few new recipients. If this is your first time seeing our newsletter, welcome! If you would not like to received future newsletters like this, please let us know and we can remove you from the list. Thank you!

The Financial Steward Associates Team:
Marion, Heather, Lindsay, Drew, Kevin, and Santiago
" The purpose of life is not to be happy. It is to be useful, to be honorable, to be compassionate, to have it make some difference that you have lived and lived well."
                                         - Ralph Waldo Emerson
News and Events
February 2020
Issue #93


Important Dates:

February 17: Our office is  closed for President's Day.

We are now accepting applications for our Annual Scholarship Program

Weekly Commentary:

Good News on Trade
Street View: Good News on Trade



Do your LPL accounts have a Trusted Contact?

Trusted Contact information provides us with a person designated by you as a point of contact if we have concerns about financial exploitation. This person can also be a valuable resource to us in various other ways, as they can act as a resource to assist us if we are unable to reach you after multiple attempts, or if we have concerns about your health, etc. 

Our Administrative Assistant, Santiago Huerta, is working on a project to solicit the LPL Trusted Contact information if you have not yet added a contact to your accounts.
Resource of the Month
A Bucket Plan to Go With Your Bucket List: A bucket plan can help you be better prepared for a comfortable retirement.

 Setting Every Community Up for Retirement
Enhancement (SECURE) Act
As Enacted on December 20, 2019 · Prepared for LPL by Davis & Harman LLP

Top 10 Key Provisions

1.  Open Multiple Employer Plans / Pooled Employer Plans - The SECURE Act allows unrelated small employers to band together in "open" 401(k) multiple-employer plans (MEPs; also referred to as pooled employer plans (PEPs)). This reduces the costs and administrative duties that each employer would otherwise bear alone. The Act also eliminates the "one-bad-apple" rule under which a violation by one employer participating in a MEP can trigger severe penalties for the compliant employers in the MEP. 
2.  Safe Harbor 401(k) Plans and Timing of Plan Amendments and Adoptions - The SECURE Act very generally permits employers to add a safe harbor feature to their existing 401(k) plans during the year; such additions are even permitted very late in the year and after the end of the year if the employer contributes at least 4 percent of employees' pay instead of the regular 3 percent. It also allows employers to adopt a plan for a taxable year as long as the plan is adopted by the due date for the employer's tax return for that year (including extensions). 
3. Startup Credit for Small Employer Plans and New Credit for Small Employer Plans Adopting Automatic Enrollment - The SECURE Act increases the business tax credit for plan startup costs to make setting up retirement plans more affordable for small businesses. The tax credit will increase from the current cap of $500 to up to $5,000 in certain circumstances. It also encourages small-business owners to adopt automatic enrollment by providing a further $500 tax credit for three years for plans that add auto-enrollment. 
4. Post-70½ IRA Contributions - The prohibition on making deductible contributions to a traditional IRA after age 70½ is repealed. 
5. Long-Term Part-Time Employees - The SECURE Act requires employers to include long-term part-time workers as participants in defined-contribution plans except in the case of collectively bargained plans. Eligible employees will have completed at least 500 hours of service each year for three consecutive years, and are age 21 or older. However, these participants can be excluded from employer contributions, nondiscrimination and top-heavy requirements. Previously, part-time workers could be excluded if they haven't worked 1,000 hours in a 12-month eligibility period. 
6. Plan Withdrawals for Birth or Adoption - The SECURE Act allows an exception to the 10 percent penalty for birth or adoption. New parents can now withdraw up to $5,000 from a retirement account within a year of a child's birth or adoption without the 10 percent penalty those younger than 591/2 would normally owe. The distribution, which is still subject to tax, can be repaid to a retirement account. 
7. Increased Required Beginning Date - The SECURE Act increases the age triggering the required beginning date for plans and IRAs to 72. 
8. Consolidated Form 5500 Reporting for Similar Plans - The SECURE Act offers a consolidated Form 5500 for certain defined-contribution plans with a common plan administrator to reduce administrative costs, but also increases penalties for failure to file retirement plan returns, such as Forms 5500, required notifications of registration changes and required withholding notices. 
9. Fiduciary Safe Harbor for Selecting Annuity Providers - The SECURE Act creates a safe harbor that employers can use when choosing an annuity provider to provide annuity distributions under a defined-contribution plan. 
10. "Stretch" RMD - The SECURE Act imposes a 10-year distribution limit for most non-spouse beneficiaries to spend down inherited IRAs and defined-contribution plans. Before passage of the Act, withdrawals from inherited accounts could be stretched over the life of beneficiaries to mitigate taxes.



This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. 

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity. If your financial professional is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL may also be employees of the bank/credit union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union. Securities and insurance offered through LPL or its affiliates are: 

Not Insured by FDIC/NCUA or Any Other Government Agency
Not Bank/Credit Union Guaranteed
Not Bank/Credit Union Deposits or Obligations
May Lose Value


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Financial Steward Associates
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Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Financial Steward Associates, a registered investment advisor and separate entity from LPL Financial.

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