Inside the SECURE ACT: How New Law Could Impact Your Money, Your Savings Habits and Your Retirement

When the SECURE Act became law in late 2019, it was widely hailed as a step forward for people seeking greater financial security and flexibility in retirement.

“Passing the SECURE Act is a big victory that will help ensure that all hard-working Americans have a chance to build a nest egg for their retirement,” said Ohio Republican Sen. Rob Portman, who devised and championed some provisions of the law.

Prudential, a large insurance company that offers a range of retirement savings vehicles, said the law “contains the most significant legislative enhancements to the private-sector retirement system in over a decade and will improve the retirement readiness of millions of Americans.”

As broadly lauded as the SECURE Act (the tidy acronym stands for Setting Every Community Up for Retirement Enhancement) was upon its passage, whether it has the desired impact in helping to remedy America’s retirement savings shortcomings likely won’t become clear for some time. Many of its provisions took hold Jan. 1, 2020. The law is widely viewed as an incremental policy step toward giving retirement savers greater means and incentive to create a secure financial future for themselves, but hardly a panacea for an overall savings shortfall that today has many people financially ill-prepared for retirement.

“There is still more that we can do to help more Americans save for their retirement,” Portman said in a statement. “I believe that passage of the SECURE Act can help pave the way for bolder reforms in legislation.”

As for how the law will impact people and families, FPA member and CERTIFIED FINANCIAL PLANNER™ professional Kristin McKenna of Darrow Wealth Management in Concord, Mass., said it’s too early to tell. “It’s going to depend on a person’s individual circumstances, and a lot of people may not feel any impact for a while. The folks who I expect will feel its impact the soonest will be those who are nearing retirement.”

Whether you’re a person for whom retirement is a current reality, an approaching likelihood or a remote, decades-away consideration, chances are strong you’ll be affected to some extent by the SECURE Act. What exactly is in the new law? Which of its provisions will affect whom, and when? Here’s a look at some of the key aspects of the law, with insight from a handful of CERTIFIED FINANCIAL PLANNER™ professionals on their potential impact.
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