Some potential benefits of the Securing a Strong Retirement Act.
Provided by Taylor McClish
Recently, you may have seen headlines regarding the Securing a Strong Retirement Act, also referred to as the second version of the SECURE Act, or SECURE Act 2.0.
As the bill moves from the House of Representatives to the Senate, many hopeful investors are anticipating further retirement support as the majority of the bill stems from the original SECURE Act of 2019. However, it’s worth noting that the bill may change drastically before being signed into law. With that in mind, here are some potential benefits of the Securing a Strong Retirement Act.
Required Minimum Distributions (RMD): For those who contribute to a 401(k) or IRA, the Securing a Strong Retirement Act may allow you to wait until age 74 to start taking RMDs from your retirement accounts.1
Catch-up Contributions: Those who own an IRA and are over age 60 may be allowed to contribute an additional $10,000 per year to their retirement accounts.1
Student Loans: Employers may be allowed to match retirement contributions for employees who are paying off student loans.1
There’s little doubt the bill
will benefit many retirees or those approaching retirement; the only question
that remains is “how.” If you have any questions about how this new legislation
may impact your retirement strategy, or you just want to chat, give me a call
anytime. We’re always here to help.
Taylor McClish may be reached at (503) 239-3060 or Taylor.McClish@cunamutual.com
Oregonians Financial Planning Website
This material was prepared by MarketingPro, Inc., and does not
necessarily represent the views of the presenting party, nor their affiliates. This
information has been derived from sources believed to be accurate. Please note
- investing involves risk, and past performance is no guarantee of future
results. The publisher is not engaged in rendering legal, accounting or other
professional services. If assistance is needed, the reader is advised to engage
the services of a competent professional. This information should not be
construed as investment, tax or legal advice and may not be relied on for the
purpose of avoiding any Federal tax penalty. This is neither a solicitation nor
recommendation to purchase or sell any investment or insurance product or
service, and should not be relied upon as such. All indices are unmanaged and
are not illustrative of any particular investment.
Under the SECURE Act, once you reach age 72, you must begin taking
required minimum distributions from a Traditional Individual Retirement Account
in most circumstances. Withdrawals from Traditional IRAs are taxed as ordinary
income and, if taken before age 59½, may be subject to a 10% federal income tax
penalty. You may continue to contribute to a Traditional IRA past age 70½ under
the SECURE Act. Contributions to a Traditional IRA may be fully or partially
deductible, depending on your adjusted gross income.
Additionally, you must also begin taking required minimum
distributions from your 401(k) or other defined-contribution plans in most
circumstances at age 72. Withdrawals from your 401(k) or other
defined-contribution plans are taxed as ordinary income and, if taken before
age 59½, may be subject to a 10% federal income tax penalty.
Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. CUNA Brokerage Services, Inc., is a registered broker/dealer in all fifty states of the United States of America.
Citations
1. Congress.gov, May 5, 2021
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