The SECURE Act (Setting Every Community Up for Retirement Enhancement Act) is major legislation that was passed by Congress as part of a larger spending bill and signed into law by the
president in December. Here are a few provisions that may affect you. Unless otherwise noted, the new rules apply to tax or plan years starting January 1, 2020.
If you’re still saving for retirement
To address increasing life expectancies, the new law repeals the prohibition on contributions to a traditional IRA by someone who has reached age 70½. Starting with 2020 contributions, the age
limit has been removed, but individuals must still have earned income.
Key Retirement and Tax Numbers for 2019
Every year, the Internal Revenue Service announces cost-of-living adjustments that affect contribution limits for retirement plans and various tax deduction, exclusion,
exemption, and threshold amounts. Here are a few of the key adjustments for 2019.
Employer retirement plans
•Employees who participate in 401(k), 403(b), and most 457 plans can defer up to $19,000 in compensation in 2019 (up from $18,500 in 2018);employees age 50 and
older can defer up to an additional$6,000 in 2019 (the same as in 2018).
•Employees participating in a SIMPLE retirement plan can defer up to $13,000 in 2019 (up from $12,500 in 2018), and employees age 50 and older can defer up to an
additional $3,000 in 2019 (the same as in 2018).
On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act, a sweeping $1.5 trillion tax-cut package that fundamentally changes the individual and business tax landscape.
While many of the provisions in the new legislation are permanent, others (including most of the tax cuts that apply to individuals) will expire in eight years. Some of the major changes included in
the legislation that affect individuals are summarized below; unless otherwise noted, the provisions are effective for tax years 2018 through 2025.
If your financial plan for 2017 didn’t work out the way you wanted it to, don’t beat yourself up. Instead, ask yourself the following questions to determine what you can learn from reflecting on your financial situation in the last year.
Did you meet your financial goals and expectations for 2017?
Perhaps you started the year with some financial goals in mind. You wanted to establish a budget that you could stick to, or maybe you hoped to build up your
emergency savings fund throughout the year. If you fell short of accomplishing these or other goals, think about the reasons why. Were your goals specific? Did you
develop a realistic timeframe for when they would be achieved? If not, learn to set attainable and measurable goals for your finances in the new year.