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Stalled after passing in the House this past summer, the SECURE Act was finally signed into law on December 19th, 2019. Officially titled the Setting Every Community Up for Retirement Enhancement Act of 2019, the SECURE act is sweeping legislation with a number of changes that we continue to digest and analyze. The majority of the provisions went into effect as “The Ball” dropped when the clocks struck midnight on January 1, 2020.

The following is a short list of some of the more notable changes:

  • RMDs are now required at age 72. Previously, the year in which you attained age 70.5 was the start of annual required distributions from Traditional IRA(s) (and other retirement plans). The new law extends that age to 72. This only applies to those that have not yet reached RMD status (i.e. have not started taking RMDs as of 01/01/2020).
  • IRA (and other retirement plans) non-spousal beneficiaries are now required to fully distribute the inherited balance within ten years. This is a significant change to the stretch provision that allowed beneficiaries to distribute those assets over their own lifetime. Note – there is no change for the rules pertaining to spousal beneficiaries.
  • Removed the age limitation on contributions to Traditional IRAs. Under the old provisions, contributions were no longer allowed once reaching age 70.5. Going forward, Traditional IRA owners are allowed to make contributions as long as they have earned income, without an age restriction.

Along with the updates noted above, the SECURE Act aims to make it easier for small business owners to establish retirement savings plan that are less expensive and easier to administer. This includes allowing many part-time employees the ability to participate.

For 529 account owners, the new law allows families to make qualified distributions from their plan for student loan repayment. There is an aggregate lifetime limit of $10,000 per 529 plan beneficiary and $10,000 per each of the beneficiary’s siblings.

This is a significant piece of legislation. Although we are excited to see the extension of the RMD age, removing the stretch provision from non-spousal retirement account beneficiaries will absolutely have a significant impact on how we think about beneficiary designations and estate planning.

Link to the SECURE ACT 2019.



Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. While familiar with the tax provisions of the issues presented herein, Raymond James financial advisors are not qualified to render advice on tax or legal matters. You should discuss any tax or legal matters with the appropriate professional.