SAN DIEGO - March 3, 2020 - (Newswire.com)
According to the U.S. Bureau of Labor Statistics, only 55 percent of the adult population participates in a workplace retirement plan. The SECURE Act, a recent bill signed into law in late 2019, aims to improve these numbers by encouraging Americans to prepare for retirement. However, the bill may affect your retirement plan in unexpected ways. Steve Sexton, leading financial consultant and CEO of Sexton Advisory Group, shares key takeaways on how the SECURE Act may affect your retirement strategy:
- Limits on stretch individual retirement arrangements (IRAs) - there will be no more lifetime stretch of IRAs to beneficiaries. The SECURE Act modifies the required minimum distribution rules in regard to defined contribution plans and IRA balances upon the death of the account owner. Under the new rules, distributions to non-spouse beneficiaries are required to be distributed within 10 years following the account owner’s death. For many people, this means reconsidering their legacy strategy.
- IRA contributions - Prior to 2020, individuals over the age of 70 and 1/2 years of age could not contribute to their IRA; this is no longer the case, as the age limit has been eliminated. As long as you have earned income (part time and full time), you can contribute to your IRA.
- IRA distributions - You are now mandated to begin taking required minimum distributions (RMDs) from a traditional IRA at the age of 72. Additionally, Section 113 of the SECURE Act now includes an allowance for a penalty-free distribution up to $5,000 for a qualified birth or adoption.
- Small businesses are incentivized to set up retirement plans – to make it easier and less expensive for small businesses to offer retirement plans to employees, the SECURE Act makes credits available to small business owners that establish retirement plans
For more information on the SECURE Act, visit https://www.sextonadvisorygroup.com.
About Steve Sexton
For more than 16 years, financial professional and founder of Sexton Advisory Group Steve M. Sexton has built a reputation on identifying issues costing clients thousands of dollars in taxes, eradicating unidentified fees and expenses, solving estate problems, and eliminating any unknown risks. A cancer survivor, Sexton is deeply passionate about helping individuals and families better prepare for the unexpected via advanced life planning services and in-depth client education.
Sexton has been a financial contributor and expert for CNN, ABC, NBC, CBS, FOX, THE CW, The American Dream TV show, plus more, appearing locally and nationally more than 420 times.
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Original Source: Sexton Advisory Group Shares 4 Ways the SECURE Act Affects Retirement Planning