IMPORTANT: SECURE Act Changes Retirement Savings Law

By Renee Faltings, CRPS® - ClearRock Senior Investment Advisor and Retirement Plans Specialist December 21, 2019 Insights

To avert a government shutdown that would have taken place on December 20, 2019, Congress approved a massive government spending bill. Included as part of that bill was the retirement savings bill known as the “Setting Every Community Up for Retirement Enhancement” Act, or simply the “SECURE Act.” As reported by Charles Schwab in December, a few of the key provisions in the retirement savings portion of the bill include:


  • Change to RMD age. The law raises the age at which individuals must begin taking RMDs (required minimum distribution) from their retirement accounts to 72 from 70 1/2. Important: The new law only applies to people who turn 70 ½ after December 31, 2019. If a person turned 70 ½ in 2019, the law does not apply.
  • Contributions to traditional IRAs after age 70 ½. IRA contributions can continue at any age as long as you have earned income. Currently, one can’t contribute after age 70 ½.
  • New rules for inherited retirement accounts. In the past, a non-spouse beneficiary of an IRA or 401(k) could stretch out RMDs from the plan over their own life expectancy. Starting January 1, 2020, if an owner of IRAs and 401(k)s passes away and leaves the accounts to a beneficiary other than their spouse, the beneficiary will only have 10 years after the year of death to distribute the entire retirement account unless the beneficiary is a qualified eligible beneficiary as defined in the SECURE Act.
  • Penalty-free withdrawals for birth/adoption expenses. New parents can withdraw up to $5,000 from an IRA or an employer-sponsored retirement plan to pay for birth and/or adoption expenses. The withdrawal will be taxed but no early penalty applies.

These are just a handful of the changes being implemented via the SECURE Act. As always, our mission is to foster a sense of financial well-being for our clients.

What You Should Do Next:


Some material in this article is based on information from a variety of sources we consider reliable, but we do not represent that the information is accurate or complete. The material provided herein is for informational purposes only. Due to various factors, including changing market conditions, the content  may no longer be reflective of current opinions or positions. Moreover, you should not assume that any  discussion or information contained in this article serves as the receipt of, or as a substitute  for,  personalized  investment  advice  from  ClearRock  Capital,  LLC.  To  the  extent  that  a  reader  has  any  questions regarding the applicability of any specific issue discussed above to his/her individual situation,  he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of our current  written  disclosure  statement  discussing  our  advisory  services  and  fees  is  available  for  review  upon  request.


Author Renee Faltings, CRPS® - ClearRock Senior Investment Advisor and Retirement Plans Specialist

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