President Signs “Secure Act”

President Trump today signed the “Secure Act” as part of the year-end spending bill. The “Secure Act” modifies several key retirement planning components, including:

  • Extending the age at which Required Minimum Distributions begin to age 72. This applies to everyone who is not yet 70 ½ on 12/31/2019.
  • Changing the rules for Required Minimum Distributions for non-spousal inherited IRAs and 401(k)s. When children or grandchildren inherit IRAs after 12/31/2019, they will no longer be able to spread out distributions throughout their lifetimes. Instead, they will be required to deplete the accounts within ten years of inheriting them. This rule will not apply to certain government plans (including the TSP) and qualified annuities that have already been annuitized.
  • Repealing the maximum age to make an IRA contribution: If you’re still working, you’ll be able to make an IRA contribution, much like you are currently able to make a 401(k) contribution.
  • Updating 529s to include a provision for student loans: Up to $10,000 of 529 plan money can now be used to pay off student debt. This amount is on a lifetime basis, not an annual basis.

In the coming weeks, the Allegiant Private Advisors team will be updating our financial and estate planning projections for all clients. During your next review, we will discuss what changes you should consider making to your current plan, if any.