What is The SECURE Act and How Will It Affect Me?

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On December 20th last year, Congress approved the SECURE Act in hopes of making more accessible retirement plans for small business owners. SECURE stands for Setting Every Community Up for Retirement Enhancement, which sounds great, but doesn’t explain much! The main goals of this act are to encourage businesses to offer retirement plans to their employees, and do prompt employees to save more for retirement.

The SECURE Act can be broken down in to 7 main points.


  1. Higher Tax Credits for Small Businesses

Small businesses already are eligible for tax credits when they implement a retirement plan, but now, if they also offer and automatic enrollment, the tax credit increases by up to $500 a year!


  1. Expanded Multi-Employer Plans

Unrelated small business are able to share the costs of a retirement plan for employees. Plain and simple.


  1. Long Term Part Time Employees Eligible

If an employee works at least 500 hours a year for three consecutive years, he too becomes eligible for enrollment in the company’s retirement plan!


  1. Delayed Start of Required Minimum Distributions

IRA owners now have 6 more months to contribute to their plans than before. Life expectancy has increased so it only makes sense that you start using your savings a little later.


  1. Repealed Age Limit for IRA Contributions

In addition to the extra six months before drawing from an IRA, owners can also add to it even after age 72, whereas previously whey could not.


  1. Annuities and Lifetime Income Options

The Act simplifies compliance and other rules by offering a safe harbor provision. It also requires that plan participants get an annual disclosure showing how much they employee will be getting monthly at retirement.


  1. No More “Stretch” IRAs

Beneficiaries now have to withdraw inherited IRAs and retirement plans within 10 years and pay the taxes associated. Certain beneficiaries like surviving spouses, minors and others are exempt from this requirement.


So what all of this really means it that it’s time to get your retirement planning in check! Whether it’s an IRA, 401K, or another form of savings, I can help you plan and choose the best option for you, your family and your future!


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