Broker Check

The SECURE Act Has Passed…What This Means for You

December 26, 2019

President Trump recently signed the SECURE ACT as part of the most recent government spending bill, with the effort of strengthening retirement security nationwide. How does this affect you?


  1. Required Minimum Distributions

Starting January 1, 2020, you will not have to start taking required minimum distributions until age 72 (increased from 70.5). If you are not 70.5 in 2019, you will fall under the new RMD rules. This should be taken into account when planning for cash flows and taxes.


  1. Inherited IRA Stretch Rule

This Act requires beneficiaries to completely withdraw IRAs and retirement plans within 10 years and pay the resulting tax liability. The 10 year rule does not apply to some beneficiaries, such as surviving spouses, disabled individuals, minors and those who are not more than 10 years younger than the account owner.


This is an opportunity to talk to your advisor to see if a Roth conversion makes sense or a change in beneficiaries. It may be beneficial, under some circumstances, to split the primary beneficiary between your wife and children so your children have a longer time period to stretch the distributions. This only makes sense, of course, if your wife has sufficient assets.


  1. Repeal of Age Limitations for IRA Contributions

The SECURE Act permits those over age 70.5 with earned income to contribute to a traditional IRA.


  1. Expansion of Plan Eligibility to Long-Term Part-Time Employees

The legislation expands employee coverage to those that have worked at least 500 hours per year for the past three consecutive years. This is a decrease from the current 1,000 hours per year. This change is effective for plan years beginning after December 31, 2020.


The Act includes several other changes that will affect business owners who have retirement plans as well. We are here to answer any questions you may have on your individual retirement accounts or plans.



Merry Christmas and Happy New Year! 


Maeve Beard, Senior Investment & Trust Officer