President Trump Signs SECURE Act into Law — Evoking Major Changes to Retirement Plans
It’s somewhat of a sensation, considering the last major threshold for retirement plans was the Pension Protection Act of 2006. Two large changes for the individual investor are (1) the age for participants to take required minimum distributions (RMDs) will change from 70½ to 72 and (2) the stretch IRA will reduce to 10 years for this who inherit retirement accounts. Another provision regards child-rearing: In 2020, parents can withdraw up to $5,000 from a retirement account within a year of a child’s birth or adoption; However, they must pay income tax on the withdrawal.
Among the many provisions of the SECURE legislation impacting employer retirement plans: The tax credit for employers introducing new retirement plans will be bumped up from $500 to $5,000 — and small employers with an automatic enrollment feature will be eligible for an additional $500 credit. Also, many part-time employees will be eligible to participate in a retirement plan. Keep an eye out for our blog on this, coming soon, where we take a deeper dive into what this means for the future of retirement plan options. Read more in detail about the SECURE Act in our latest blog.
Will the Markets be Affected by the Impeachment Saga?
As President Trump’s impeachment articles are transferred over to the Senate, many are speculating what effect it will have on the markets. History suggests that the answer might be ambivalent: Stocks went south when Nixon was impeached, while they went north after Clinton’s debacle. “From an economic standpoint, impeachment simply hasn’t mattered—and it isn’t likely to,” says Brad McMillan, chief investment officer for Commonwealth Financial Network. This quote is reinforced by the fact that the Senate is likely to acquit the president in their voting. For more perspective on this issue, click here.