Following passage by both houses of Congress, President Trump signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, on December 20, 2019.  The SECURE Act contains several provisions designed to encourage small employers to establish retirement plans and to encourage employees to participate in them.  The SECURE Act also contains several notable changes regarding contributions to, and withdrawals from, retirement plans. 

Among the most important changes are:

• With few exceptions, non-spouse beneficiaries of IRAs will no longer be able to ‘stretch’ distributions over their life expectancies. In almost all circumstances involving non-spouse beneficiaries, retirement accounts will need to be distributed within 10 years of the owner’s passing.
• The SECURE Act eliminates the maximum age at which contributions can still be made to retirement plans. As long as an individual has earned income for a tax year, they may make contributions to a retirement plan. 
• An individual who has not reached age 70 ½ by the end of 2019, is not required to begin taking Required Minimum Distributions (RMDs) until the year they reach age 72 (previously age 70½). The Act does keep the provisions allowing an individual to delay their initial RMD until April of the year following their 72^nd birthday.
• The SECURE Act allows up to $5,000 per child to be withdrawn without penalty from a retirement plan to pay for expenses related to the birth of a child or adoption of a minor child.
• The Act allows up to $10,000 per individual to be withdrawn as a qualified expense from a 529 Plan if used to repay student loans of the beneficiary of the plan or their sibling.
• When trusts are named as beneficiaries to an IRA, special complexities can arise. Your advisor can help interpret the new rules in light of your individual trust documents.
  
  

For questions or additional information about the above changes, and how they may impact your own individual financial situation, please contact your GW & Wade Counselor or contact us here.

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Investment advisory services offered through GW & Wade, LLC.

The information above is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change. GW & Wade cannot guarantee that this information is accurate, complete, or timely.  We make no warranties with regard to such information or results obtained by its use. Always consult an attorney or tax professional regarding your specific situation. 

Clients of the firm who have specific questions should contact the GW & Wade Counselor with whom they regularly work. All other inquiries, including any inquiry concerning a potential advisory relationship with GW & Wade, should be directed to:

Laurie Wexler Gerber, Client Development Manager
GW & Wade, LLC
781-239-1188
lgerber@gwwade.com