What is the Secure Act?

The Secure Act is piece of retirement legislation that was making headlines the past several months as it navigated through Congress. The House of Representatives passed the proposal back in May of 2019 and it was recently approved by the Senate in the middle of December.

The Secure Act imposes a spectrum of changes primarily pertaining to the handling of an individual’s retirement savings. Additional changes include adjustments to the administrative handling of retirement accounts, revenue provisions, the expansion of benefits utilized by 529 education savings accounts, as well as some additional tax benefits for firefighters and first responders.

Listed below, in generalized context, are a few of the changes that pertain to a percentage of our clients:

  • Non-spousal inherited IRAs now require liquidation over a 10-year period rather than having the option to “stretch” the distributions over your own life expectancy
  • The age for beginning Required Minimum Distributions (RMDs) is pushed to age 72 from 70 ½
  • Contributions to a Traditional IRA is allowable after age 70 ½
  • Qualified Charitable Distributions (QCDs) are still allowable
  • Expansions to the use of 529 Education Savings accounts; including student loan repayments up to $10,000 per individual in a lifetime

Sigma’s Investment Committee is familiar with the contents of the Secure Act and is well equipped to help our clients thoughtfully navigate any material changes that could influence their financial affairs.

All comments and suggestions are welcome.

Daniel J. Robinson, CFP®