What is the SECURE act of 2019?

To start with, SECURE stands for “Setting Every Community Up for Retirement Enhancement”.
This is the first major change to standard retirement plans that we have seen in years. Here are a few of the highlights:
Increase Required Minimum Distribution Ages
Today, the law requires that most individuals take out required minimum distributions (RMDs) from their retirement accounts once you reach age 70.5. The SECURE Act would delay this requirement to age 72. The RESA Act currently in front of the Senate seeks to push RMD requirements even further back to age 75. If the age for RMD’s is pushed out, that means your retirement dollars will have more years to grow.
Removal of Age Limitation on IRA Contributions
For years, there has been a rule that essentially discouraged retirement savings in IRAs for people who continued to work later in life. After age 70.5, you could no longer contribute to an IRA, but amazingly, you could still contribute to a Roth IRA. Sec. 114 of the SECURE Act would remove this savings limitation by repealing the age limitation for traditional IRA contributions.
Removal of “Stretch” Inherited IRA Provisions
The SECURE Act would make significant changes to inherited retirement plans like 401(k)s, traditional IRAs, and Roth IRAs. In the past, beneficiaries of these accounts could typically spread the distributions over their own life expectancy.
However, the new bill includes what is viewed as a tax-generating provision that would require most beneficiaries to distribute the account over a 10-year period. This change would accelerate the depletion of inherited accounts for many large IRAs and retirement plans.

There are more provisions to the act, these are just some highlights. I feel the passage of this act would be good for everyone.


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