Broker Check

8935 N. Meridian Street
Suite 113
Indianapolis, IN 46260


Barnes Financial Services

(317) 663-8452


Key Components of the Secure Act


Key Components of the SECURE Act include:


  • 401(k)s for part-time employees;


  • IRA contributions for graduate students;


  • Penalty-free for student loan debt;


  • Penalty-free for birth or adoption;


  • Annuities in 401(k) plans;


  • IRA contribution age limits eliminated; 


  • Required Minimum Distributions (RMDs) increased to age 72 and Inherited “Stretch” IRA Eliminated (partially).





 401K Plans for Part-Time Employees


  • Part-Time Employees eligible for a 401(k) contribution have worked at least 500 hours per year for at least (3) consecutive years and are at least age 21 or older


  • Includes Profit-Sharing Plans but not Employee Stock Ownership Plans (ESOP). 


  • Previously, employers were able to exclude Part-Time Employees working less than 1,000 hours




IRA Contributions for Graduate Students 


  • Graduate Students with post-doctoral stipends and non-tuition payments can be treated as compensation for purposes of making IRA contributions.


  • Previously, stipends and non-tuition payments received by graduate and post doctoral students were not treated as compensation.


 Penalty-Free for Student Loan Debt


  • Withdrawals up to $10,000 from 529 Plans to pay off student loan


  • Amount can also comprise of the beneficiary's siblings, including brother, sister, step-brother, or step-sister



Penalty-Free for Birth or Adoption


  • Withdrawals up to $5,000 from their plan to assist with costs related to the birth or adoption of a child.


  • With married couples, each spouse may withdraw up to $5,000 penalty-free for a qualified birth or adoption.




Annuities in 401(k) Plans


  • Benefits those in need of more access to and sources of retirement income as an optional safe


  • Offering lifetime income benefit options under a defined contribution plan, similar to a defined benefit (or “pension”)




IRA Contribution Age Limits Eliminated 

  • Allows individuals employed past age 70 ½ to contribute to IRAs, matching the rules for 401(k) plans and Roth IRA's


  • Previously, individuals with earned income couldn’t contribute to a Traditional IRA past age 70 ½.



IRA RMDs Increased to Age 72

  • This rule is only applicable to individuals who did not reach age 70 ½ by the end of
  • Previously, RMDs were age 70 ½ with some receiving a distribution in the same year they turned age 70 while others were age
    • January 1 – June 30: Age 70
    • July 1 – December 31: Age 71





Inherited “Stretch” IRA Eliminated


  • The “new law” does not affect non-qualified stretches (e.g. non-qualified annuity). 


  • As of January 1, 2020, beneficiaries are limited to 10 years (unless an eligible beneficiary). 


  • Current Inherited IRA beneficiaries are still eligible to “stretch” but this allowance is removed under new rules going forward.