SECURE ACT: Changes Are Coming to Retirement Savings Rules

Babs Harmon 03.10.20
Woman with money

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If you already have a retirement savings plan, either through an Individual Retirement Account (IRA) or a 401(k) savings plan through your employer, you may want to pay attention.

With the new Setting Every Community Up For Retirement Enhancement Act of 2019 (SECURE Act), there are going to be some changes to the retirement savings rules. We’ve highlighted just a few of the key changes that we believe are meaningful to you. For a complete, official summary of the act, visit

1. Required Minimum Distributions (RMD) 

The new law pushes back the oldest age at which you will be required to start withdrawing money from those retirement accounts. It was 70½ years of age, but it’s increasing to 72 years of age. This means savings can grow for a longer period of time if you’re not ready to take money out of your retirement account yet.

2. Long-Term Part-Time Employees

Under the SECURE Act, long-term part-time employees may now be eligible to participate in the plan. If a part-time employee has worked at least 500 hours for three consecutive years and meets the minimum age requirement for eligibility to participate, the employee must be offered the opportunity to do so. 

This requirement goes into effect for plan years beginning after December 31, 2020; however, this doesn’t mean part-time employees have to be included in 401(k) plans starting in 2021. Instead, it means employers must begin tracking hours for eligibility purposes, so employers have some time to prepare. Additional guidance and exclusions are listed in the official summary of the act. 

3. Birth/Adoption Distribution

New parents can now withdraw funds to help pay for childbirth or adoption expenses up to $5,000 during the one-year period beginning on the date the child is born or adopted. This distribution is not subject to the 10% early withdrawal penalty. 

For more information or questions contact the Nextep retirement team at

Disclaimer: The information provided is not written or intended as specific tax or legal advice.  

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