SECURE ACT: Changes Are Coming to Retirement Savings Rules

Babs Harmon 03.10.20
Woman with money

Please visit our COVID-19 resources page with more information for business owners and employees.

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 congress.gov

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 401k@nextep.com.

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

Also on Nextep

Telehealth services like Teladoc® can provide 24/7/365 access to a doctor by web, phone, or mobile app.  Whether you have a minor illness or a chronic condition, telehealth has become an essential tool for many employees by saving them time and money. A National Library of Medicine study shows people using their telehealth are more engaged in their health care. […]
Read more
With a vast range of individual and family situations, it’s essential to provide benefits that meet your employees’ needs wherever they are in life.  Much like your workplace policies, your employee benefits should align with your diversity and inclusion (D&I) goals. Look at your benefits annually and ask yourself if they reflect your workforce’s needs, […]
Read more
Even before the pandemic, no one wanted to sit in a doctor’s waiting room feeling ill or with a sick child.  Now, with COVID-19 cases on the rise and winter’s seasonal illnesses upon us, it’s more important than ever to have a telehealth option for your employees.  At Nextep, we partner with Teladoc® to offer […]
Read more
It’s time to prepare for next year’s medical expenses, but it can be tough to know how much to set aside.  That’s one advantage of enrolling in a flexible spending account (FSA) or a health savings account (HSA). It allows you to prepare for expected and unexpected medical expenses. An FSA and HSA allow you […]
Read more
Americans are spending less and stashing away more cash than ever, but healthy financial habits are still essential. According to the U.S. Department of Commerce, people were saving about 7.5% of income before the COVID-19 pandemic and now are socking away 14%. People may be saving more because of fear of job loss or because […]
Read more
Taking care of your health is vital, but research can be a daunting task when you need to know facts quickly. Nextep is here to ensure you have what you need, right at your fingertips. We’ve gathered info, tools, and resources all in one place to assist you with prediabetes, high blood pressure, and weight […]
Read more
The physical and mental well-being of your employees is as essential post-quarantine as it was months ago.  At Nextep, we’re doing what we can to ensure our employees are healthy and stay that way. Keeping up with your employees’ well-being can be challenging, so here are a few ways to promote workplace wellness. Have a […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. The CARES Act is a $2 trillion stimulus package aimed at providing relief during the COVID-19 crisis.  The bill includes essential info regarding eligible expenses for people with health savings accounts (HSA), flexible spending accounts (FSA), and health reimbursement arrangements (HRA). […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. In a crisis or pandemic, life can seem a little scary.  It’s easy to lose sight of the good in the midst of all the bad. That’s why mental health, positive thinking, and taking care of yourself has never been more […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. As the COVID-19 situation unfolds, more people are seeking care from home with telemedicine.  At Nextep, we know your health care has never been more important. We’re monitoring new laws, answering questions, and communicating info from our partners, like Teladoc.  Aetna’s […]
Read more
Please visit our COVID-19 resources page with more information for business owners and employees. Here’s what Aetna members need to know about resources and programs. As concerns about COVID-19 continue to spread across the U.S., Nextep’s health care partner, Aetna/CVS, announced it was taking steps to help members affected by the virus.  Waiving copays for […]
Read more
Living healthy is not just about weight loss or gain, it’s about taking care of your body so you can have the energy to live your best life for as long as possible.  Healthy can be different for everyone. You may have a health condition, disability, or food allergy that doesn’t allow you to eat […]
Read more

Download Our App