Written by Taylor Financial Group, LLC
Getting on the road to retirement might be easier than before.
On May 23, 2019, the House of Representatives passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act, with an overwhelming majority of 417-3.
The SECURE Act is the largest retirement-oriented legislation to pass in over a decade!1 On its way to the Senate, there is a high likelihood that this retirement bill will be a full-fledged, grown-up law by the end of 2019.
Below we address three of the Act’s key provisions that you may want to consider while saving for your retirement.
1. Required Minimum Distribution (RMD) Age Increased
To help grow your retirement budget, the SECURE Act will allow you to delay IRA withdrawals until age 72, instead of 70 ½2. That’s right, an extra year and a half to start building up those retirement accounts!
Luckily, for seniors (and advisors), 72 is less confusing than 70 ½. This will give advisors one less thing to worry about when having to explain to their clients about retirement planning and RMDs (click here to read our blog post about when you should start taking out an RMD).
Some Benefits You Should Consider…
- A later starting age for RMDs allows for additional tax deferrals.
- For example, a couple can sock away another $14,000 a year using spousal IRA’s, including “catch-up” contributions.3
2. Student Loan Repayment Relief
If you have children (or even grandchildren), you should be familiar with the skyrocketing costs of sending your kids to school. The SECURE Act would allow parents to withdraw up to $10,000 from 529 education-savings plans to help pay off piling student loan debt.4
Not only will this Act help those who are currently cruising down the retirement lane, but also parents and families who are striving trying to do so.
3. New Parents Saving for Retirement
The SECURE Act would also allow new parents to withdraw up to $5,000 from their retirement plans.5 This would cover expenses related to a new baby or adoption, while avoiding the early 10% withdrawal fee.6 However, keep in mind that taxes will still be due on the withdrawals.
Now, it is about time to get on that road to retirement!
Have a question about retirement planning in Bergen County, New Jersey?
Check out these blogs on related topics!
1 – barrons.com/articles/what-the-retirement-bill-means-for-savers-and-retirees-51558729046
2 – forbes.com/sites/adamsarhan/2019/06/17/new-retirement-bill-is-coming-the-secure-act-setting-every-community-up-for-retirement-enhancement/#6b4cc84b6017
3 – barrons.com/articles/what-the-retirement-bill-means-for-savers-and-retirees-51558729046
4 – bankrate.com/retirement/how-secure-act-could-impact-retirement-savings/
5 – bankrate.com/retirement/how-secure-act-could-impact-retirement-savings/
6 – barrons.com/articles/what-the-retirement-bill-means-for-savers-and-retirees-51558729046