The New SECURE Act - Carroll Financial
January 31, 2020

The New SECURE Act

Author: Kristopher W. Carroll, CFA®, CFP®


The Setting Every Community Up for Retirement Enhancement (SECURE) Act was signed into law on December 20th, 2019. The SECURE Act made a few significant changes to retirement accounts, altered some rules and created new provisions.


Some of the more notable changes in the law that affect our clients include:

1. Required Minimum Distributions: The SECURE Act raised the age for Required Minimum Distributions (RMDs) from 70½ to 72. This provides an extra year and a half to delay withdrawals and the income tax associated with the distributions.

This only affects you if you did not turn 70 ½ before 12/31/2019.

2. Stretch IRAs: The SECURE Act eliminated the Stretch IRA. Under previous law, non-spouse beneficiaries (typically your kids) were able to spread distributions from their Inherited IRAs over their life expectancies. The SECURE Act now requires that non-spouse beneficiaries of Inherited IRAs must withdraw all funds within 10 years.

This rule only affects IRAs inherited on or after January 1, 2020.

3. No Age Restrictions On Traditional IRA Contributions: The old law prevented individuals over 70 ½ from contributing to a Traditional IRA. However, the SECURE Act removed this age limit.

If you are over 70 ½, still working and have earned income, you might be able to make a contribution to your IRA.


Most of the additional provisions from the bill are very specific. For example, the Act will make it easier and less expensive for small business owners to set up retirement plans for employees.  It may also allow many part-time workers to start participating in their employer-sponsored retirement plans.


Bottom Line: The biggest changes from the SECURE Act will affect individuals who turned 70 ½ after January 1st 2020, because it will delay their first RMD withdrawals. If you have questions about how the SECURE Act might affect you, please do not hesitate to give us a call at (704) 553-8006.

Retirement Income, Retirement Planning, Tax Planning
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