Why Saving for Retirement Is About to Be Easier Than Ever

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Saving money can be tough, a fact that seems to get more and more painfully true with each generation.

That said, we are all going to want to retire one day (in theory), and it looks like Congress is going to do their best to make that an achievable goal for all of us with the Setting Every Community Up for Retirement Enhancement Act of 2019.


The act, known as the SECURE Act, was part of the year-end spending bill, which has been approved by the house (and will presumably be approved by the Senate, as well). It contains new rules and changes to existing rules that attempt to make saving for retirement easier than ever.

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A few things you’ll definitely want to know.

First, changes to current contribution rules:

  • Even employees who work part time – less than 1,000 hours per year for one year or 500 hours per year for three consecutive years – would be eligible to participate in that company’s 401k program.
  • Small businesses will get a $500 tax credit for creating a new 401k or SIMPLE IRA plan that include automatic enrollment. The credit will be available for 3 years, and small businesses with existing plans can make them compliant to receive the credit.
  • Graduate and post-doc students will be able to use tax-free income from fellowships or stipends, etc. to contribute to an IRA.
  • Healthcare workers currently being prevented from using “difficulty of care” income to contribute will also be able to do so.


And some changes to the distribution rules and requirements:

  • It removes the maximum age to contribute, which is currently 70.5
  • It increases the age when distributions become mandatory, from 70.5 to 72.
  • It allows penalty-free withdrawals from retirement plans for births and adoptions, in addition to existing exemptions for tuition, home-buying, funerals, or other designated hardships.

Plus, this nice little bonus!

  • 529 education savings accounts will now cover the costs of apprenticeships, up to $10k in student loan repayment, and private elementary and secondary schools.

So, there you go! It might be a minute before the Senate signs off, President Trump agrees, and the plans go into effect, but at least now you’re aware of what you need to know going forward.

Save away, my friends. When you’re in your 70s, that cash will be well worth the investment.