In May 2019, with a 417-3 vote, the House of Representatives passed the Setting Every Community Up for Retirement Enhancement Act (SECURE). SECURE is a bipartisan bill designed to aid Americans' ability to save for retirement and improve the country's retirement prospects. What’s in the bill that could get both parties to agree? Most would think nothing of interest considering the sharp divide between parties right now,but there is good news: There are some actual items of significance!
Below are some highlights of the ways this Act impacts individuals and businesses.
Raising the required minimum distribution age to 72 from 70 ½
Allowing penalty-free withdrawals (up to $5,000) from retirement plans for the birth or adoption of a child
Removing maximum age limits on retirement contributions, formerly capped at age 70 ½
Allowing penalty-free withdrawals (up to $10,000) from 529 education-savings plans for the repayment of certain student loans
Decreasing the distribution period of an inherited IRA from the lifetime of the beneficiary to a period of just 10 years
Allowing retirement benefits for long-term, part-time employees (E.g. an employee that works at least 500 hours over three consecutive years)
Offering employers a tax credit (up to $5,000) if they are a small business and start a retirement plan, plus an additional $500 if their employees are automatically enrolled in the plan
Simplifying rules and notice requirements related to qualified non-elective contributions in safe harbor 401(k) plans
The House of Representatives produced a six-page summaryof all proposed revisions. We consider those outlined above to be the most pertinent and impactful. If the Senate passes the bill and it is signed into law, changes will be made that impact you.
Our team of experts is ready to speak with you about your options and help you navigate the new Setting Every Community Up for Retirement Enhancement Act. Give us a call to schedule a meeting.
Jason Berry, CPA