The full Senate passed by a 71-23 vote Thursday the Setting Every Community Up for Retirement Enhancement (Secure) Act as part of the year-end spending bill.
The spending package is expected to be signed into law by President Donald Trump on Friday as the current continuing resolution funding the government expires.
Andy Friedman, founder and principal at The Washington Update, told ThinkAdvisor that the Secure Act , H.R. 1994, “affects IRA and 401(k) account holders favorably by increasing the RMD age and eliminating restrictions on IRA contributions for certain workers.”
The sweeping retirement bill also “curtails the use of ‘stretch IRAs,’” he said, “although that strategy remains available.”
Friedman pointed to other important aspects of the Secure Act that he said are receiving less attention. For instance, Secure expands “the availability of 401(k) plans for small businesses, and that facilitate the use of annuities in 401(k) plans,” opening up an opportunity that broker-dealers have overlooked.
“Now that small businesses may band together in a single 401(k) plan, a broker-dealer can set up a plan and offer it to small-business clients and potential clients,” Friedman, former tax attorney for the NFL, explained. “Doing so provides a needed service to small businesses, and an opportunity for the firm to collect assets.”