The SECURE Act: What is it and how it affects retirement planning?

By Kindur | December 19, 2019

The SECURE Act – possibly the most significant retirement reform legislation of the last decade passed both the Senate and House this week. Having languished in the Senate for months after the House passed the measure in May, the bill was included as part of a government spending package for 2020.

What is the SECURE Act of 2019?

The SECURE Act stands for Setting Every Community Up for Retirement Enhancement. This act provides more incentives to save during retirement with tax-deferred benefits. The SECURE Act eliminates age restrictions to participate in retirement plans, increases the age for Required Minimum Distributions (RMDs), and allows small businesses to offer 401(k) plans.

How does the SECURE Act change my retirement plans?

The SECURE Act contains many popular measures designed to help Americans prepare for retirement including the following important provisions:

  • Increasing Age for Beginning Required Mandatory Distributions: The Act increases the required minimum distribution age from 70½ to 72. This change will provide up to two extra years for your money to grow tax deferred in qualified accounts such as IRAs and 401(k) plans before you are required to withdraw it.
  • Eliminating prohibition on traditional IRA contributions for those over 70 ½: Many people are working beyond age 70 today, either by choice or out of necessity. With the restriction on contributions to traditional IRAs lifted, workers in their 70s will continue to have the opportunity to take advantage of the benefits of saving in tax-deferred accounts until they are ready to retire or even in retirement. That’s more time to build the nest egg to support an increasingly longer life in retirement.
  • Allowing Part-time Workers to Participate in 401(k) Plans: Currently, part-time employees (those working less than 1,000 hours per year) are not able to participate in company 401(k) plans. The SECURE Act changes this by allowing employees working at least 500 hours a year for three consecutive years to participate in a company plan. Allowing part-time employees to contribute to employer sponsored plans is particularly important both to women, who have part-time employment rates 3-5 times higher than similarly situated men, and older workers who often shift from full-time to part-time status or return to work at less than full-time. With the growing trend of part-time work during retirement, this will enable retirees to continue to save.
  • Increased Ability for Small Employers to Offer Retirement Plans: The SECURE Act also permits small employers to band together to form one retirement plan (called a multiple employer plan or “open MEP”). It is estimated that open MEPs would result in the formation of 600,000 to 700,000 new retirement accounts.

Why are Stretch IRAs going away with SECURE Act?

In order to pay for these new measures, the SECURE Act will eliminate the so-called “stretch” IRA. Currently, younger beneficiaries – for instance, children or grandchildren – are allowed to take RMDs from an inherited IRA based on their own, much longer, life expectancy. This allows them to “stretch” the time for their distributions which provides decades of tax-deferred growth in the IRA. However, under the new rules, most IRA beneficiaries (other than a spouse) will be required to deplete the entire inherited IRA within 10 years which will push higher RMDs into the prime working years – and highest tax years – of a beneficiary’s life. This change alone is estimated to result in a $16 billion increase in tax revenue. Anyone who has set up trusts or made estate planning decisions based on the stretch IRA provision should review their current plan in light of this change.

When will the SECURE Act Take Effect?

While some provisions of the SECURE Act will be delayed (such as new rules for part-time employees and open-MEP plans), many important provisions, such as those governing RMDs and stretch-IRAs, will be law in just about two weeks. This means that very soon many Americans will be facing new rules around RMDs, IRA contributions and stretch IRAs. 

Kindur is built for baby boomers. We can help you prepare for these changes and take advantage of new opportunities to save for retirement. To learn how Kindur can help navigate the web of decisions facing modern retirees, visit or call (800) 961-3572.

Follow Kindur

Get More News & Insights From Kindur

Important information & disclosures about Kindur’s Resource Center

Contact us today.

We're here to help get you started.

Call us (800) 961-3572.

  • About
  • Privacy Policy
  • Careers
  • Contact

Legal | Licenses

This website is operated and maintained by Kindur Services Inc. (together with its subsidiaries and affiliates, “Kindur”). By using this website, you accept our Terms of Use and Privacy Policy.

Kindur Investment Services LLC (“Kindur Investment”) is an SEC registered investment advisor. Investment advisory services are provided by Kindur Investment Services LLC (“Kindur Investment”) through its online platform and are available only to residents of the United States over 18 years old. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities. Past performance is no guarantee of future results. Any historical returns, expected returns or probability projections are hypothetical in nature and may not reflect actual future performance. Account holdings are for illustrative purposes only and are not investment recommendations. The content on this website is for informational purposes only and does not constitute a complete description of Kindur’s investment advisory services. Certain investments are not suitable for all investors and are not available to all Kindur Clients.

Before opening an investment advisory account (including for use of the Retirement Planning tool), you should review Kindur Investment’s Form ADV Part 2, which includes a description of certain risks, conflicts and fees associated with participating in the Kindur platform. Any references on this website to “guaranteed income” relate solely to the fixed annuity product offered by an affiliate of Kindur Investment and not to any investment advisory services provided by Kindur. Apex Clearing Corporation, a third-party SEC registered broker-dealer and member FINRA/SIPC, provides custody and clearing services for Kindur and serves as the custodian for advisory assets of Kindur clients.

Fixed annuity contracts are offered by Kindur Insurance Services LLC and are issued by American Equity Investment Life Insurance Company, an unaffiliated insurance company. “Guaranteed income” refers to income paid by a fixed annuity contract that may be sold to a client as a component of Kindur’s retirement platform. Guarantees do not apply to the safety of the contributions to a fixed annuity contract and are based on the claims-paying ability of the issuing insurance company. Detailed information about the fixed annuity can be found in the fixed annuity contract itself and other materials that may be delivered in connection with any application for or purchase of a contract. Early surrender charges also apply to the fixed annuity. Kindur and its affiliates do not provide tax or legal advice.

Fixed annuity contracts are not FDIC Insured and are not Bank Guaranteed. Taxable distributions (and certain deemed distributions) are subject to ordinary income tax, and if made prior to age 59 1/2 also may be subject to a 10% federal income tax penalty. Early surrender charges also apply to the fixed annuity.


Tel: (800) 961-3572

Information provided by Kindur Support is for informational and general educational purposes only and is not investment or financial advice.

© Copyright 2020 Kindur Services Inc.