New Year, New Age: the SECURE Act Increases the Required Minimum Distribution Age to 72

On December 20, 2019, President Trump signed the Further Consolidated Appropriations Act, 2020, a spending bill that includes the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”).  The SECURE Act initially passed the House in May, as discussed in our S&W Benefits Blog “The SECURE Act – A Primer on the top Six SECURE Act Changes that could be coming to Retirement Plans Next Year”, but fizzled out in the Senate.  The SECURE Act was later added to the Further Consolidated Appropriations Act, 2020, which passed Congress and was sent to the White House on December 19. Read More ›

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The SECURE Act – A Primer on the Top Six SECURE Act Changes that could be coming to Retirement Plans Next Year

The SECURE Act (the “Act”) passed the House with bipartisan support and is on its way to the Senate with predictions that it could end up on the President’s desk by the end of the year. Here are some highlights of this potential legislation.

1. Longer Life means Later Mandatory Distributions. To account for increases in life expectancy, the Act would increase the age for required minimum distributions from 70 ½ to 72. The Act will also repeal the maximum age for traditional IRA contributions.

2. Auto-Enrollment Incentives. Automatic enrollment has been shown to increase both participation and higher savings, so to incentivize this plan design, the Act will provide a tax credit for small employers adopting plans with this design and increases the cap from 10% to 15% for automatic escalation in an automatic enrollment safe harbor plan. Read More ›

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