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  • Overman & Parks, CPAs, PA

Understanding the Newly-Passed 2019 SECURE Act


In December of 2019, new legislation was passed to further assist Americans in saving for retirement, known as the SECURE Act. Here are high points:


  • SECURE stands for "Setting Every Community Up for Retirement Enhancement."

  • Beginning in 2020, you can contribute to your retirement account regardless of your age, as long as you have taxable compensation.

  • Roth IRAs are not changing.

  • Beginning this year, the required minimum distribution age increases to 72. (This only applies to those who have not already been required to take an RMD).

  • If you’re inheriting a traditional IRA, 401(k), SEP or SIMPLE from someone other than your spouse, you’ll want to pay attention to the SECURE Act change regarding "stretching" these accounts.

  • If you’re a non-spouse beneficiary, you’ll need to take all account distributions by the end of the 10th calendar year following the individual’s death. There are some exceptions to this requirement, such as for the disabled or chronically ill, minor children or any other person who is not more than 10 years younger than the account owner. Also, if you’re already "stretching" an inherited account, you can continue doing so.

  • The SECURE Act also allows you to take penalty-free withdrawals of up to $5,000 from a retirement plan for any qualified birth or adoption expenses.

  • With the SECURE Act, you can now use a lifetime limit of up to $10,000 per 529 plan beneficiary to repay student loans without facing a penalty.


Photo Credit: Wix


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