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Retirement Plans 2020 – What’s New SECURE Act, What to Do With Plan Assets, and Protecting Your Crew

As we ring in the new year, it is essential for individuals and employers to stay abreast of changes to retirement plans and regulations. The Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was signed into law on December 20, 2019, brought about several important changes to retirement plans. Additionally, it’s crucial for employers and plan participants to be informed about what to do with plan assets, and how to protect their financial future.

The SECURE Act, in particular, contains numerous provisions that aim to enhance retirement security for Americans. One of the key highlights of the SECURE Act is the increased access to retirement savings accounts for part-time workers. Previously, part-time employees who worked less than 1,000 hours in a year were typically ineligible to participate in an employer-sponsored retirement plan. With the new law, these workers will now have the opportunity to save for retirement through their employer’s plan.

Another significant change brought about by the SECURE Act is the elimination of the maximum age for contributions to traditional Individual Retirement Accounts (IRAs). This provision is particularly impactful for older Americans who are continuing to work past the traditional retirement age and want to continue saving for their future.

In addition to these changes, the SECURE Act also introduced new requirements for inherited retirement accounts. Under the previous law, beneficiaries of inherited IRAs could ‘stretch’ out their withdrawals over their lifetime. However, with the new law, most beneficiaries are required to withdraw the assets within 10 years of the original account owner’s death. This change has significant implications for estate planning and tax strategies related to inherited retirement accounts.

As individuals and employers navigate these changes to retirement plans, it’s important to consider how to make the most of plan assets and protect their financial wellbeing. For those who have accumulated retirement savings, it’s essential to have a clear understanding of their options for managing and distributing those assets. In some cases, individuals may choose to roll over their retirement savings into an IRA to gain more control and flexibility over their investments. Others may opt to keep their funds in their employer’s plan, especially if it offers low-cost investment options or allows for penalty-free withdrawals at an earlier age.

Furthermore, it’s imperative for employers to take steps to protect their crew or employees as they plan for retirement. Offering financial education and counseling can be valuable in helping employees make informed decisions about their retirement savings. Employers can also consider implementing automatic enrollment and escalation features in their retirement plans to help employees increase their savings over time.

In conclusion, the changes brought about by the SECURE Act, along with the ongoing need to manage retirement assets and protect employees’ financial futures, highlight the importance of staying informed and proactive in planning for retirement. By understanding the new regulations, making informed decisions about plan assets, and taking steps to safeguard the financial wellbeing of employees, individuals and employers can better navigate the complex landscape of retirement planning in 2020 and beyond.