Congress has passed the new SECURE ACT, that will make big changes in how you save for retirement.  Our lead story addresses key points of this law and its impact on your planning.

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President Trump signed the SECURE Act in December as part of the government’s spending bill and it will inevitably affect most retirement savers, for better or worse.

The SECURE legislation — which stands for “Setting Every Community Up for Retirement Enhancement” — puts into place numerous provisions intended to strengthen retirement security across the country.

Part of the bill addresses the grim outlook for many workers who don’t have access to workplace retirement accounts.

It offers small businesses tax incentives to set up automatic enrollment in retirement plans for its workers, or allows them to join multiple employer plans, where they can band together with other companies to offer retirement accounts to their employees in the first place. The bill also eliminates the maximum age cap for contributions to traditional individual retirement accounts.

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New SECURE Act Will Make Roth
Strategies Much More Appealing

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, which passed the House in a sweeping 417-3 vote, was incorporated into an end-of-year spending bill and was signed by the President on December 20, 2019. SECURE will vastly change the way savers think about saving for retirement. The Act consists of 29 provisions covering a variety of enhancements to qualified plan rules, including allowing long-term part-time workers to participate in 401(k) plans and letting small employers join together to make it possible to offer their employees 401(k) plans. There are, however, two standout provisions that will affect the way many savers look at retirement.

First, the Required Minimum Distribution (RMD) age is extended to 72. This change grants 'accumulators' the ability to delay initiating their RMD, which, in turn, will allow their IRA to continue to grow for an additional 1 ½ years. Second, and far more consequential, is the elimination of the ‘stretch’ provision. Under prior law, IRAs (and qualified plans) that were left to a nonspouse, human beneficiary could be withdrawn over that beneficiary’s life expectancy.

Strong December caps off terrific year for markets
What a difference a year can make. At the end of 2018, markets were selling off due to political concerns, and the year finished on a sour note. But 2019 had a significantly better ending for investors. Markets experienced solid gains in December, capping off an impressive quarter and year. All three major U.S. indices were up for the month; the S&P 500 returned 3.02 percent, the Dow Jones Industrial Average (DJIA) gained 1.87 percent, and the Nasdaq Composite rose 3.63 percent. This positive performance led to a quarterly gain of 9.07 percent for the S&P 500, 6.67 percent for the DJIA, and 12.47 percent for the Nasdaq. The annual figures are even more impressive, with the S&P returning 31.49 percent, while the DJIA and Nasdaq grew by 25.34 percent and 36.69 percent, respectively.Read More