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Congress Passes the SECURE Act

Congress recently passed the SECURE Act. While most Americans have never heard of this legislation, it will have immediate and significant implications. We are expecting major changes to the rules surrounding IRAs and retirement accounts, which will be effective January 1st, 2020.

Below is a summary of the legislation’s most significant changes that could impact you:

  • Longer Time to Contribute. Although Roth individual retirement accounts (IRAs) have no contribution age limit, contributions to traditional IRAs are currently not permitted after you reach age 70½. The legislation would repeal this age limit.


  • Later Required Minimum Distributions (RMDs). Currently, plan participants and traditional IRA owners are generally required to start withdrawing a minimum amount from their retirement savings each year once they reach age 70½. The new rules would increase this age to 72, allowing savers to enjoy tax-deferred compounding even longer.


  • No More “Stretch” IRAs for Non-Spouse Beneficiaries. Current rules allow most IRA beneficiaries to “stretch” RMDs from an inherited account over their own lifetimes. The proposed rules would continue this feature for spouses, but non-spouse beneficiaries would need to take distributions within 10 years of the IRA owner’s death – beginning for deaths occurring after 12/31/19 - with some exceptions to the general rule. 


  • Multiple employer plans (MEPs). The legislation would allow employers to combine forces with other unrelated employers to form a MEP. This provision is aimed specifically at small businesses that otherwise could not offer a 401(k) to their employees due to their high administrative costs.

Our team is closely following the new legislation. As a result, we will be incorporating these changes into our planning conversations.

 If you have specific questions or would like to discuss your own investment strategy or financial planning needs, we welcome you to call us at 302.234.5655 or email us at contactus@covenantwealthstrategies.com to set up time to discuss further.