Explain These 3 Consumer Benefits in the New Secure Act

As reported earlier in this blog, Congress approved a new law to improve the retirement security of U.S. workers just before Christmas of 2019. The “Setting Every Community Up for Retirement Enhancement,” known as the SECURE Act, took effect on Jan. 1, 2020 and introduced the most far-reaching legislation on retirement since the Pension Protection Act of 2006.

The story that got most of the attention focused on the end of the “stretch” Individual Retirement Account (IRA) for middle- and upper-income Americans, which prior to the change of law had allowed non-spouse beneficiaries to withdraw inherited money over their lifetime and avoid paying taxes.

Business reporters can develop a series of linked stories on SECURE. Report on one, or all, of the consumer stories suggested below, which describe the new law’s benefits for workers, parents and those with student loan debt. Then add the second part of the series, by reporting the stories that focus on your local business community of small-business owners and 401(k) administrators.

Are more older workers saving for retirement?

Any number of surveys, including this 2018 report from the Stanford Center on Longevity, finds that older workers aren’t saving enough for retirement. Until SECURE, workers who reached the age of 70½ had to stop contributing, and start withdrawing, from their retirement accounts; now they keep contributing indefinitely as long as they are employed. In 2021, SECURE will allow employers to offer long-term, part-time employees to save for retirement; previously, workers couldn’t contribute unless they worked 1,000 hours a year.

Use your news organization’s social media channels to engage with readers. How many intend to take advantage of—or are even aware of—the new law? Also contact the human resource departments of several small, medium, and large businesses in your reporting area and ask what processes they’ve put in place to update their part-time and older workers on SECURE’s benefits.

Are parents planning on children in 2020s?

The new law allows parents to withdraw up to $5,000, penalty-free, from a 401(k) or IRA after the birth or adoption of a child. Considering the cost of raising a child today, $5,000 is a substantial benefit. In 2018, it cost $233, 610 to raise a child, according to the U.S. Department of Agriculture.

Loop a Certified Public Accountant (CPA) and a financial planner into your discussion to review all the family-friendly tax credits available to prospective parents.

Are readers tapping SECURE benefits in 2020 to pay off student loan debt? Student loan debt is soaring and becomes a harder struggle for those with families to raise. Over the past three decades, the cost of college has tripled at public universities and doubled at private institutions, according to the College Board. SECURE allows the holder of a 529 education savings plan to withdraw up to $10,000 to pay off certain student loans, which grants substantial relief. The average student loan debt is about $30,000.

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