In late December 2019, the Setting Every Community Up for Retirement Act was signed into law. Otherwise known as the SECURE Act, the rules were designed to increase access to tax-advantaged accounts and help prevent older citizens from outliving their retirement savings. Here are just a few major highlights from the act of which savers should be aware:

Required minimum distributions

The age at which traditional IRA account owners must take minimum distributions has moved from age 70½ to 72. Be cautious, however. This rule only applies to those who were born on or after July 1, 1949. If you were taking RMDs because of your age in 2019, they have to continue in 2020 and beyond.

Traditional IRA contribution age cap removed

Previously, you were only allowed to make contributions to a traditional IRA until the year you reached age 70½. The SECURE Act allows individuals to make IRA contributions at any age, provided they have earned income in the year they contribute. Some restrictions still are in place, of course. Consult an investment or tax professional to see if you are fully eligible to make tax-deferred contributions.

Inherited retirement accounts

Prior to the SECURE Act, non-spousal beneficiaries of retirement accounts were allowed to stretch required minimum distributions over their lifetimes. After passage of the new act, distributions to individual beneficiaries must be made within 10 years. Why? Distributions from tax-deferred retirement accounts are considered taxable income. Imagine a 20-year-old inheriting an IRA from a deceased grandparent. It could take decades for that inherited account to be fully depleted and taxed. Retirement accounts were not originally designed to be multi-generational assets, but the potential was there without the new rules.

Adoption/birth expenses

The new law makes it possible to take penalty-free (I didn’t say tax-free) withdrawals from retirement plans for birth or adoption expenses, up to certain limits. Again, consult with a professional to get the details. Nobody likes to be caught at the wrong end of a tax surprise.

Small business benefits

The SECURE Act offers tax credits of up to $5,000 for the start-up costs related to establishing an employer-sponsored plan, such as a 401(k). Certain factors will determine eligibility, but if you are looking for ways to attract and retain great employees, offering a retirement plan has often proven to be a winner. Additionally, small business owners can now band together to create buying groups and participate in plans with potentially more attractive cost structures. Plan costs are a huge component to providing a successful retirement plan, and plan sponsors should be reviewing costs critically and regularly.

Often times, people hear new rules are passed and we automatically prepare ourselves to be restricted in some way. For the most part, the SECURE Act appears to benefit a large number of Americans who will likely need to depend more and more on themselves in their retirement years. Contact a Certified Financial Planner™ professional by visiting and see how the SECURE Act can benefit you!

Jeremy Sorci, CFP®, AFIM™ is a financial advisor for Premier Financial Group. You can email him at

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