President Trump is expected to sign into law the Setting Every Community Up for Retirement Enhancement (SECURE) act as part of the massive year-end spending bill passed by Congress. Below are the salient points:
- Removal
of the age limit for contributing to IRA plans.
- The current law prohibits contributions to anyone over 70 ½ years.
- The proposed law allows anyone 70 ½ or older to contribute to a traditional IRA so long as they have reported income
- Small
companies can ban together and offer a 401(K) plan
- Will receive tax credits for
implementing automatic enrollment.
- Opt out vs. opt in.
- Part time employees who work 500 hours a year for three consecutive years or 1,000 hours for one year must be included
- Will receive tax credits for
implementing automatic enrollment.
- Required
minimum distribution (RMD) age
- Current law required RMD to start at 70 ½
- The proposed law will raise the age to 72
- Retirement
plans are encouraged to include products that provide annual income like
defined benefit plans
- Annuities are now permissible investment vehicles
- Insurers, not employers are responsible for providing annuity products
- Stretch
Plans will be phased out
- Under current law, anyone who inherits an IRA can spread out their RMD over their expected lifetime
- The new law requires all
RMD’s must be taken within 10 years
- Exclusion is available to
- Spouses
- Beneficiary when their birthday is within 10 years of the deceased
- Minors
- Those with disabilities
- Exclusion is available to
- This is a tax / estate planning nightmare
Here is a link to an article: https://money.com/what-serure-act-retirement-law-means-for-you/
Let’s talk about what this may mean to your financial plan.
Season’s Greetings.