The “Setting Every Community Up for Retirement Enhancement” (SECURE) Act was signed into law on December 20, 2019, as part of the government's spending bill. The bill puts into place provisions designed to increase access to tax-advantaged accounts and to prevent older Americans from outliving their assets.
The SECURE Act allows:
Small businesses to set up 401(k)s by increasing the cap under which they can automatically enroll workers in “safe harbor” retirement plans, from 10% of wages to 15%, making it easier for employers to offer this benefit.
Businesses to sign up part-time employees who work either 1,000 hours throughout the year or have three consecutive years with 500 hours of service.
Retirement plan participants to delay their required minimum distributions from age 70.5 to 72 for those who are not 70.5 by the end of 2019.
Contributions to a traditional IRA after age 70.5, which was prohibited by former regulations.
The use of tax-advantaged 529 accounts for qualified student loan repayments, subject to a $10,000 lifetime limit per beneficiary.
Penalty-free withdrawals of $5,000 from 401(k) accounts to defray the costs of a qualified birth or adoption.
Contact our office to discuss how this new bill may benefit you as a small business owner or a retirement plan participant in the future.