SECURE Act: What does it mean for investors?



SECURE stands for: Setting Every Community Up for Retirement Enhancement

The SECURE Act has come into play as of January 1, 2020. The following are key changes brought about by this Act:

IRAs and Age Limits:

1. Elimination of the age cap for contributions to Traditional IRA Accounts. As long as you are still earning an income, you can contribute to a Traditional IRA indefinitely.**

2. The age at which Required Minimum Distributions (RMDs) begin has been increased to age 72.

**This only applies to individuals who turn 70 1/2 after December 31, 2019. If an individual turned 70 1/2 in 2019, the age increase does not apply.


IRAs and Inheritance:

1. IRAs inherited after January 1, 2020: Elimination of Stretch IRA for non-spousal account inheritors. This means non-spousal inheritors must distribute the inherited IRA within 10 years of receiving the inheritance.

    a. Exceptions to this rule may include:

    • Surviving spouses
    • Minor children
    • Beneficiaries not more than 10 years younger than the deceased
    • A beneficiary who is disabled
    • a beneficiary who is chronically ill

2. IRAs inherited prior to January 1, 2020 are not affected by this update. The 10 year rule applies only to accounts inherited in 2020 and beyond.


Employer-Sponsored Retirement Plans:

1. More employers can offer Annuities within 401(k) plans.

2. The SECURE Act broadens the ability for Multiple Employer plans for small businesses. This means employers can group together under one plan, without being within the same industry, to obtain a wider range of plan options.

3. The required number of hours worked per year for long-term part-time workers to qualify for contribution to their employer-sponsored retirement plan has been adjusted. The threshold is now 1,000 hours worked for one full year or three consecutive years of at least 500 hours worked per year.

4. A Tax Credit is available for employers that automatically enroll workers into the sponsored retirement plan.


Withdrawals from IRAs and employer-sponsored retirement plans:

1. New parents can now withdraw up to $5,000 from an IRA or an employer-sponsored retirement plan to pay for birth and/or adoption expenses up to one year after the birth or adoption. Taxes must still be paid on pre-tax contributions, but an early-withdrawal penalty will not be applied.


529 Plans:

1. Assets in 529 college-savings plans may now be used to repay up to $10,000 in student loans.

Please enter a first name.
Please enter a last name.
Please enter an email address.
1000 characters remaining
Please enter a message.


One Day In July LLC
77 College St. #3A
Burlington, VT 05401

DIFFERENTIATORS
GETTING STARTED
MATERIALS
How Are We Different
Understanding Your Financial Statement
Articles on Investing
Investing with Low Cost Index Funds
Pay Yourself First
About the SECURE Act
Why Use a Fiduciary Financial Advisor?
Financial Planning
Quarterly Booklets
Simple, Low Investment Fees
Investor Resources
Investment Tools
Financial Firm Comparison
The Investment Process
One Day In July in the Media
Local Financial Advisor
How to Switch Financial Advisors
Frequently Asked Questions
Types of Investors
SERVICES
Types of Accounts We Manage
Options for Self-Employed Retirement Plans
Saving Strategies
What to do When Receiving a Pension
Investment Tax Strategy: Tax Loss Harvesting
Vermont Investment Management
How to Invest an Inheritance
Investment Tax Strategy: Tax Lot Optimization
Vermont Retirement Planning
How to Make the Best 401k Selections
Investing for Retirement: 401k and More
Vermont Wealth Management
How to Rollover a 401k to an IRA
Environmental Investing: How it Differs from ESG
Vermont Financial Advisors
How to Invest for College Savings
INVESTING THOUGHTS
Should I Try to Time the Stock Market?
Mutual Funds vs. ETFs
Inflation
The Cycle of Investor Emotion
Countering Arguments Against Index Funds
Annuities - Why We Don't Sell Them
Aim for Average
How Finacial Firms Bill
Low Investment Fees
Understanding Fixed Income: Interest Rate Risk
Investing in a Bear Market
Investing in Gold
Is Your Investment Advisor Worth One Percent?
Active vs. Passive Investment Management
Investment Risk vs. Investment Return
Who Supports Index Funds?
Articles by Dan Cunningham
Does Stock Picking Work?
The Growth and Importance of Female Investors
Behavioral Economics

Shelburne, VT Financial Advisor

Frank Koster | Josh Kruk

145 Pine Haven Shores Road, Suite 2212

Shelburne, VT 05482

(802) 777-9768

Stowe, VT Finanical Advisor

Available for meetings in Stowe.

Peter Egolf

(802) 999-2321

Burlington, VT Financial Advisor

Hans Smith | Katie Bensel

Nancy Westbrook | Peter Egolf

Adam Roof

77 College Street #3A

Burlington, VT 05401

(802) 503-8280

Essex, CT Office

Keith McCarthy

5 Essex Square, Suite 3A

Essex, CT 06426

(860) 581-7011

Rochester, VT Financial Advisor

Available for meetings in Rochester, VT and surrounding area.

Carrie McDonnell

(802) 767-7665


v 2.3.12 | © One Day In July LLC. All Rights Reserved.