The Secure Act: Making Retirement a Little Easier

American Senior Alliance started our non profit 4 years ago with the simple mission, to fight for our older Americans and protect their hard earned dollars. 

At the close of 2019, Congress managed to pass the “Setting Every Community UP for Retirement Enhancement Act” (SECURE Act) that will give Americans more options to save for retirement.  We supported this bipartisan legislation sponsored by House Ways and Means Chairman, Richard E. Neal. Saving for retirement takes effort, discipline and perseverance and for the first time in a decade, Congress made it a little easier to set aside money for  retirement.

Statistics show most Americans are in bad shape when it comes to their retirement.  A recent Federal Reserve report showed 25% percent of Americans have no retirement savings. According to PEW Research, 4 out of 10 Americans say Social Security will not have the enough money to provide benefits when they retire, so we need to take action on our own to be prepared for retirement.

There are several features with the legislation that we believe will help all Americans save for their future. The SECURE Act:

  • Removes the age limitation for traditional IRA contributions - now that older Americans are taking better care of themselves they are living longer, so allowing seniors to continue contributing to the traditional IRA beyond age 70 ½ makes good sense.
  • Introduces a $500 tax credit for small employers -this feature will encourage automatic enrollment into their retirement plan. One of the best ways to save for retirement is having an employer setup a retirement savings plan for employee's. Sadly, most larger companies offer retirement savings plans, but the smaller ones struggle with this option. Thankfully, the SECURE Act offers small businesses a $500 tax credit to motivate them to offer new 401K and IRA plans that include automatic enrollment.  Also, small businesses will be able to partner together to provide retirement plans for employees allowing for savings on administrative costs. 
  • Increases required minimum distribution age - the SECURE Act increases the age from 70 1/2 to 72 before qualified holders, like 401(k) or IRA plans, have to withdraw required minimum distributions

Saving for retirement is not a simple task, but according to Fidelity Investments, these simple steps will help you be successful:

  • Start saving early - the best thing everyone can do is start saving as early as possible. This allows your investments to grow and recover in case of a downturn in the economy. Even though it may be a difficult task when you are young, giving yourself those extra years for growth will make the struggle worth it.
  • Delay retirement and strive to save 15% of your pre tax income - if you plan to work longer than 67 your 15% savings rate could be lower.
  • Let Uncle Sam help - take advantage of tax advantaged savings accounts like traditional 401(k)s, 403(b)s and IRAs. Your contributions are made before tax and can grow tax free until you withdraw it at retirement.
  • Challenge yourself - push yourself to save 1% more than your goal and over time it could develop into significant savings.
  • Catch up-once you turn 50 or older, make the most of your catch up contributions to retirement and savings plans. You are eligible to contribute an extra $1000 to your $6000 IRA limit.
  • Evaluate your portfolio-every year take time to study your portfolio to make sure it is diversified and contains the right mix of cash, stocks and bonds to meet your goals.



get updates