What You Need to Know About the SECURE Act
The SECURE Act, a law to bolster retirement savings, was recently enacted. The law contains a number of changes, some that went into effect January 1, 2020:
• The beginning age for taking required minimum distributions rises to 72 from 70½. This easing applies to account owners who turn 70½ after 2019; so if you turned 70½ in 2019, you must still take your first RMD by April 1, 2020.
• Employees who work past age 72 can delay taking RMDs from the 401(k) plan of their current employer until after they retire (doesn’t apply to individuals who own more than 5% of the company that employs them).
• Owners of traditional IRAs can make contributions past the age of 70½.
• Individuals having a baby or adopting can take payouts from IRAs and 401(k)s of up to $5,000, without having to pay the 10% fine for pre-age-59½ withdrawals.
In addition, there are changes to inherited IRAs, workplace retirement accounts, auto-enrollment requirements, and safe harbor provisions.
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Martin Hood’s Employee Benefit Plan Industry Team provides consulting and assurance services for retirement plans, health and welfare benefit plans, and plan administrators. We have worked with plans sponsored by for-profit, nonprofit, and as well governmental entities ranging in size from a few participants to over 3,000.