7 Ways The SECURE Act Might Affect Your Retirement Plan
The financial industry is constantly evolving and changing. This past May, Congress passed the Setting Every Community Up for Retirement Enhancement Act, known by the acronym Secure. The SECURE Act is the first major retirement legislation since the Pension Protection Act in 2006. The House of Representatives was highly in favor of the Secure Act with a vote of 417-3. Most sources believe the bill will likely be passed unanimously in the Senate, but before the Secure Act’s 29 new provisions are voted on, the Retirement Enhancement Securities Act (RESA) will be presented and revised. Typically, some of RESA’s changes will become a part of the SECURE Act, or parts of the SECURE ACT will be reviewed and modified before being signed into law. Recently, the Senate leaders urged to speed up the process of the bill in an attempt to move it forward with unanimous consent. However, three Republican Senators — Mike Lee of Utah, Ted Cruz of Texas and Pat Toomey of Pennsylvania — each put holds on the bill, blocking its passage via undivided consent.
The SECURE Act is currently in limbo and while we wait to find out the outcome in the Senate – lets address some of the changes and provisions the SECURE Act proposes and how that might affect you?
The SECURE Act –
- Removes the IRA age limitation of 70.5
- Increases small employer access to retirement plans
- Increases required minimum age of distribution from 70.5 to 72
- Parents can withdraw up to $5,000 from retirement accounts penalty-free for birth or adoption for up to 1 year for expenses that meet the stated qualifications
- Removes the Stretch IRA
- Tax credit for automatic enrollment in retirement plan of $500
- Parents can withdraw up to $10,000 from 529 plans to help students pay off student loans
Will the SECURE Act pass into law? If so, how will it affect me? Does this change my financial plan or when I can retire? Well – it seems that rules and regulations are always changing. At this point, the Secure Act may or may not happen. But if it does. Wouldn’t it be nice, to have a professional financial services team at your disposal to navigate an ever changing landscape? – Someone to coach you and guide you to see all facets of these regulations and help you to create the best plan for your bigger better future. Plus, an advisor can help to ensure your beneficiaries live the goodLIFE as well. To schedule an intro call click here.