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What Business Owners And Their Families Should Know About the New SECURE Act: The Features

Source: - Jul 2, 2019

Planning is never easy, especially when the rules keep changing. Each retirement and planning situation is unique; most professionals and business owners don’t retire in a conventional sense. The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 has passed the House in a 417-3 vote and is on the Senate docket for unanimous consent will change a lot, and it upends some of the traditional planning and savings strategies for professionals or business owners and their families.

SECURE has 27 provisions, most are positive. Small businesses can now join together to form 401(k) plans for their employees. Participants can have lifetime options in their plans. Long-term part-time workers can participate in 401(k) plans. Those provisions are favorable and should help people save more for retirement. Two provisions may have a significant effect on business owners: the increase in the age of initiation for RMD to age 72 (good), and the elimination of the ‘stretch,’ which has historically allowed beneficiaries of an inherited IRA to take distributions over their lifetime (bad). There’s too much within SECURE to cover in a single post, so this will need to happen in two parts: Part I is a guide to how this might affect you; Part II will shed some light on the planning opportunities this new legislation presents.

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Category: General Business