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Thursday Jun 27, 2019
Understanding The SECURE Act, Part 1
Thursday Jun 27, 2019
Thursday Jun 27, 2019
Recently passed through the House, the SECURE Act has a lot of new retirement implications. You’ll want to hear the next two episodes of the podcast as we break down the act in a two-part series. We’ll cover what this might mean for your retirement plan.
Confidence Corner
1:34 All about the SECURE Act of 2019
First major retirement legislation since 2006.
SECURE Act stands for “Setting Every Community Up for Retirement Enhancement” Act.
Passed through the House but still has to go through the Senate.
4:42 Small business retirement plans
Title 1, Section 101 will help small business employers to increase access to retirement plans.
The majority of Americans are employed by small business owners. It will give the employer tax benefits.
For small companies, 401(k) costs are big, so this will help incentivize small business owners. To do this, businesses will be lumped together potentially to the share the cost of a retirement plan.
7:56 Increased annuity options inside retirement plans
A lot of 401(k)s allow annuitization options when you retire in order to turn your 401(k) into a pension. This will be a required option inside the 401(k)s to provide a guaranteed number.
10:29 Increasing the RMD age
This is what is gaining the most publicity. Right now, you have to take required monthly distributions at age 70 and a half. Under this bill, that will increase to 72 years old.
People are living longer, so this may help spread the distributions out.
For a lot of people, Nathan doesn’t feel like this will make enough of a difference. If people need to take these distributions earlier anyway, then it’s not as big of a benefit.
15:01 Removing age limitations on IRA contributions
Right now, you cannot contribute to an IRA after age 70 and a half due to RMDs.
If you are still working, you can continue to contribute to a 401(k) or a Roth.
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