A new law was passed on December 20, 2019 and became effective January 1, 2020. SECURE is an acronym for Setting Every Community Up for Retirement Enhancement. The act is designed to help more people save for retirement in accounts likes 401(k)s and other tax-advantaged accounts so they don’t outlive their money.
Here are some of the changes the SECURE Act plan makes for retirees:
- It allows individuals to continue making traditional IRA contributions indefinitely, repealing the maximum age of 70 1/2.
- It bumps up retirement accounts’ required minimum distribution (or RMD) age from 70 1/2 to 72.
- It enables part-time workers to contribute to 401(k)s.
- It provides more ways for people to receive income throughout their lives.
- It provides small businesses, many of which don’t offer retirement plans due to the cost and complexity of operating them, with incentives if they set up automatic enrollment for employees or join multiple-employer retirement plans.
If you are wondering how the SECURE Act affects you specifically, it is a good time to check in with your advisor to make a plan and any adjustments needed for peace of mind for your retirement.