The Secure Act: A New Law For Retirement Security

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 was signed into law by President Donald Trump on December 20, 2019, as part of the 2020 federal budget appropriations bill. The SECURE Act was the first major retirement-related legislation enacted since the 2006 Pension Protection Act, and aimed to make it easier for Americans to save for retirement. The act was later updated by the SECURE 2.0 Act, signed into law on December 29, 2022.

The SECURE Act was signed into law on 20 December 2019.

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 was signed into law on 20 December 2019. It was the first major retirement-related legislation enacted since the 2006 Pension Protection Act. The SECURE Act was signed into law by President Donald Trump as part of the Further Consolidated Appropriations Act, 2020 (the 2020 United States federal budget).

The SECURE Act was drafted to assist in saving and investing for retirement. It incentivises retirement planning, diversifies the options available to savers, and increases access to tax-advantaged savings programmes. It makes it easier for small businesses to set up 401(k) plans and to expand access to their existing plans for more workers. It also incentivises employers to create 401(k) plans by increasing the cap under which they can automatically enrol workers in "safe harbour" retirement plans from 10% of wages to 15%.

The SECURE Act also makes significant changes to IRAs and 401(k)s. It pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs) from 70½ to 72, and allows traditional IRA owners to keep making contributions indefinitely. It also allows individuals to use 529 plan money to repay student loans.

The SECURE Act was followed by the SECURE 2.0 Act, which was signed into law on 29 December 2022. This updated the original SECURE Act with provisions including raising the RMD age from 72 to 73, and increasing the catch-up contribution amount for individuals over 60.

It was part of the 2020 federal budget appropriations bill

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 was signed into law by President Donald Trump on December 20, 2019, as part of the 2020 federal budget appropriations bill. It was officially enacted on January 1, 2020, and is the largest retirement reform since the 2006 Pension Protection Act.

The SECURE Act was drafted to assist in saving and investing for retirement. It incentivizes retirement planning, diversifies the options available to savers, and increases access to tax-advantaged savings programs. It was a bipartisan effort to make retirement savings more accessible to less-advantaged people.

The SECURE Act makes significant changes to the most popular retirement plans in the United States. It raises the minimum age for required minimum distributions from 70.5 years to 72 years, and allows workers to contribute to traditional IRAs after turning 70.5 years old. It also allows individuals to use 529 plan money to repay student loans and makes it easier for 401(k) plan administrators to offer annuities.

The Act also has provisions for employers. It incentivizes employers to create 401(k) plans and expand access to their existing plans for more workers. It increases the federal tax credit for defraying plan startup costs from $500 to up to $5,000, and provides an additional $500 tax credit for plans that automatically enrol new hires. It also requires employers to cover long-term, part-time workers starting in 2021.

The SECURE Act was later updated by the SECURE 2.0 Act, which was signed into law on December 29, 2022. This Act includes provisions such as raising the required minimum distribution age to 73 in 2023 and 75 in 2033, and expanding eligibility for long-time part-time employees to participate in workplace retirement plans.

It was the first major retirement-related legislation since 2006

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019, officially enacted on January 1, 2020, was the first major retirement-related legislation since the 2006 Pension Protection Act. It was signed into law by President Donald Trump on December 20, 2019, as part of the 2020 federal budget appropriations bill. The SECURE Act changed the most popular retirement plans in the United States and was designed to assist in saving and investing for retirement.

The SECURE Act incentivises employers to create 401(k) plans and expand access to their existing plans for more workers. It allows unrelated small employers to join together to establish a shared 401(k) plan known as a Multiple Employer Plan (MEP). This allows small businesses to pool resources and mitigate the administrative expenses of establishing a plan. The law also shields employers who join a Multiple Employer Plan from liability for potential misconduct perpetrated by other employers in the same plan.

The SECURE Act also increases the federal tax credit for defraying plan startup costs from $500 to up to $5,000, and provides an additional $500 tax credit for plans that automatically enrol new hires. It requires employers to cover long-term, part-time workers, defined as workers at least 21 years of age who have completed at least 500 hours of service each year for three consecutive years. It also encourages employers to include more annuities in 401(k) plans by removing their fear of legal liability if the annuity provider fails to provide.

The Act also pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs) from 70½ to 72, and allows traditional IRA owners to keep making contributions indefinitely. It also allows people to withdraw up to $10,000 during their lifetime from their 529 plans, tax-free, to pay off student loan debt.

The act was drafted to assist in saving and investing for retirement

The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law by President Donald Trump on December 20, 2019, as part of the 2020 federal budget appropriations bill. The act was drafted to assist in saving and investing for retirement, with a number of provisions to incentivise retirement planning, diversify the options available to savers, and increase access to tax-advantaged savings programs.

The SECURE Act was designed to improve the retirement prospects of American workers by making it easier for employers to offer tax-advantaged savings plans and for employees to participate in them. The act incentivises employers to create 401(k) plans and expand access to existing plans for more workers. It also allows retirement benefits to be extended to long-term, part-time employees.

The act removes the previous maximum age limit (capped at 70.5 years) on retirement contributions, allowing anyone of any age to make contributions to a traditional IRA. It also raises the required minimum distribution (RMD) age from 70.5 years to 72 years (and later to 73 years as of January 1, 2023). This delays the tax burden of withdrawals and helps preserve savings for retirees.

The SECURE Act also allows penalty-free withdrawals of up to $5,000 from retirement plans for the birth or adoption of a child. It relaxes rules on employers offering annuities through sponsored retirement plans, allowing them to be offered in 401(k) plans. It also permits multi-employer 401(k) plans for small businesses, making it easier for them to offer retirement plans to their employees.

The act also expands the uses for 529 accounts, allowing individuals to use funds within these accounts for apprenticeships and qualified student loan repayments of up to $10,000. It also allows individuals to withdraw up to $5,000 penalty-free from their retirement accounts to cover qualified costs associated with a new birth or adoption.

It was followed by the SECURE 2.0 Act, signed into law on 29 December 2022

The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 was signed into law on 20 December 2019. It was followed by the SECURE 2.0 Act, signed into law on 29 December 2022.

The SECURE 2.0 Act of 2022 is a law designed to improve retirement savings options in the US, building on the 2019 Act. It was signed into law by President Joseph R. Biden and is part of the Consolidated Appropriations Act (CAA) of 2023. The Act contains 92 new provisions to promote savings, boost incentives for businesses, and offer more flexibility to those saving for retirement.

The legislation was supported by both parties in Congress and included provisions for automatic 401(k) enrollment, an increase in the age for taking required minimum distributions (RMDs), and significant tax benefits for employers. The Act also allows for emergency withdrawals of up to $1,000 per year without penalties, and survivors of domestic abuse can withdraw up to $10,000 or 50% of their retirement account without penalty.

The SECURE 2.0 Act also addresses issues surrounding student loan debt and retirement savings. It allows employers to make matching contributions to employees' retirement plans based on their student loan payment amounts. This provision was designed to address high student loan debt, which often prevents people from saving for retirement. The Act also allows for 529 plan Roth rollovers, giving people the option to roll over a 529 plan that has been maintained for at least 15 years into a Roth IRA.

The Act also contains provisions to help people find lost retirement benefits, with a searchable database to be housed at the Department of Labor. This is in response to the millions of forgotten 401(k) accounts, amounting to nearly a trillion dollars in unclaimed retirement benefits.

Frequently asked questions