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Monday, February 10, 2020

How the SECURE Act Protects Your Retirement

Recent legislation addresses retirement issues and makes it possible for people to save more for retirement. The Setting Every Community Up for Retirement Enhancement (SECURE) Act created reforms to the retirement system. Advocates tout the SECURE Act as one of the most ground-breaking new retirement savings laws in over a decade. Learn how the SECURE Act protects your retirement by reading on, then schedule some time to talk with a Florida estate planning lawyer.

Expanding the Circle of Eligibility

In the past, many people could not save for their future through employer-sponsored retirement accounts because the employees were not eligible. The SECURE Act allows some part-time workers to participate in 401(k) plans if they are long-term employees. The new law also encourages small businesses to create 401(k) plans by offering economic incentives to those companies. The Act lets unrelated companies pool their assets and set up joint retirement plans.

More Money for You

Before the SECURE Act, employees had to start taking mandatory distributions (RMDs) from their retirement accounts beginning at age 70 ½, even if the worker was not yet retired. The new law changed the age of RMDs to age 72. This change gives your savings more time to grow before you have to start making withdrawals.

You can now take money out of your retirement plan or IRA for births or adoptions without penalties. The law also lets you pay the money back into your account. If you contribute to your account by automated contributions, the legislation allows you to put more into your account than before.

A Bird in the Hand

The purpose of saving for your retirement is to have financial security in your golden years. Before the SECURE Act, people did not have many options available for guaranteed income investments in their employer-sponsored retirement accounts. People had to invest in the stock market and other non-guaranteed return investments and hope for the best. A sharp economic downturn could wipe out years of savings.

The SECURE Act eases the restrictions on employers who want to include annuities in their plans. With people living longer than their grandparents did, many Americans worry about running out of money during retirement. The option to invest in annuity and other guaranteed income investment vehicles as part of an employer’s retirement plan can give employees more financial security for the long term.

Investing in the stock market has the potential to gain a higher rate of return than an annuity, but the value of stocks can be volatile. People who want to minimize their risk now can protect their savings and now how much income they can count on after they stop working.

Speak with Your Plan Administrator and Estate Planning Lawyer Today

Make sure that you understand the fees and other details of annuities and other retirement account options before you put your money on the line. Your employer now has to show you the guaranteed monthly income you can expect from your retirement account. Read your account statements and make sure that you are saving enough to meet your needs in retirement. You can contact your plan administrator if you have questions about your investments and schedule a consult with one of our experienced Florida estate planning attorneys today.


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The Law Office of Jeffrey A. Herzog, P.A. assists clients in Florida, including North Pinellas County, Palm Harbor, Trinity, West Pasco County, and the surrounding areas.



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