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Estrada Webb & Associates

The Secure Act Overview

The Secure Act
 Setting Every Community Up for Retirement Enhancement Act 

On December 20, the Secure Act was signed into law.
There are big changes... what does this mean for your retirement??
Some of these changes will generate questions--
and will likely require financial planning advice.


Retirement Plan and IRA provisions affecting individuals:
  1. One of the major talking points is changing the RMD (required minimum distribution) age from 70 ½ to 72
  • Individuals who attained age 70 ½ in 2019 will still need to take RMDs for 2019 and 2020, even though they may not attain age 72 until 2021. 
  1. The maximum age for making contributions to traditional IRAs was removed...makes sense given that the fastest growing demographic of workers are those over 65 years old
  • Provides consistency regarding IRA contributions, as there has never been an age restriction on Roth IRAs. 


  1. A stretch IRA has been a well utilized strategy enabling families to stretch out IRA distributions to future generations after death. Guess's gone. Now, most IRA’s (with the exception of spouses and minor children) will have to be paid out within 10 years.  
  • This compressed distribution period will result in many beneficiaries paying higher taxes on distributions from inherited IRAs and qualified plan accounts. 
Provisions affecting employers and qualified plans:
  1. Small businesses will receive tax incentives of up to $500 per year for retirement plans with automatic enrollment 
  1. Alternatively, employers can pool together to share access to retirement plans.
  • Should be easier for employers to create or join MEPs allowing for economies of scale, which may lower cost to plan sponsors and the participants, making offering a plan more attractive to employers.                      
  1. An employer may elect to treat a plan adopted after the end of a taxable year but before the due date (plus extensions) of the employer’s tax return as having been adopted as of the last day of the taxable year.
  • Allows employers to determine after the end of a year that its profits are sufficient to support the establishment of a qualified plan. 
Other provisions:
  1. 529 Plans now allow tax-free distributions for up to $10,000 of distributions over an individual’s lifetime to make payments on student loans. 


  1. Medical expenses are deductible only if they exceed 7.5% of adjusted gross income (AGI). This has been reduced from 10% allowing more taxpayers to take the deduction. 
Need a plan to protect your hard earned savings?
Secure Act Overview Estrada Webb
This material reflects our understanding of the Setting Every Community Up for Retirement Enhancement Act (SECURE Act), enacted on December 20, 2019. It is not intended to cover all provisions of the act or its potential impacts. Some provisions may require action by the Treasury Department, the Internal Revenue Service, or both so that they can be fully implemented. We expect the Treasury Department and IRS to provide guidance on areas that may be unclear. 
The information provided is not written or intended as specific tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel.