SECURE Act 2019 – Quick Facts

As you are likely aware, the President has signed a spending package that included the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The goal of the SECURE Act is to improve the nation’s retirement system through various provisions intended to benefit individual savers with IRAs and support small business owners wishing to offer retirement plans.

Some of the key provisions included in the SECURE Act you should be aware of:

  • Required Minimum Distributions: The required minimum distribution (RMD) age increased to 72 for IRAs, 401(k)s, and other defined contribution plans. This change applies to individuals that attain age 70½ in 2020.

  • Contribution age limits: The Act eliminates the age cap for contributing to traditional IRAs.

  • Inherited IRAs: The Act will limit the maximum distribution period for most non-spouse beneficiaries to 10 years from the year of death of the IRA owner (eliminating the “stretch IRA” option).

  • Adoption and birth of a child exception: IRA owners can withdraw money following the birth or adoption of a child without paying the 10% federal additional tax for early withdrawal.

  • Retirement plan annuity options: The Act makes it easier for 401(k) plan sponsors to offer annuities as an investment option.

  • Portability of annuities in plan: The Act will make it easier to distribute an annuity from a plan.

  • Small-business retirement plan market: The Act will make it easier for small business owners to join Multi-Employer Plans.