President Donald Trump has signed the Setting Every Community Up for Retirement (Secure) Act into law as part of the year-end spending bill.
Among a host of sweeping retirement planning changes, the new law also allows tax-free 529 college savings plan distributions to be used to pay for registered apprenticeship programs and up to $10,000 in student loan payments. The president put his signature on the legislation late Friday.
SavingforCollege.com applauded Secure’s passage into law and stated that over 30 states offer an additional state income tax deduction or income tax credit for 529 plan contributions.
“Most states have a Dec. 31 deadline to contribute, but a few will allow residents to claim a prior-year tax deduction up until April 2018,” the website explained.
The bipartisan Secure Act “will be transformational for the future of retirement for American workers and employers by modernizing the U.S. retirement system,” Paul Rangecroft, Aon’s head of North America Retirement Consulting and Administration, said via email on Saturday.
More American workers “will have access to qualified, workplace retirement plans through the expansion of open multiple employer plans (open MEPs) and employers will have an enhanced ability to provide valuable retirement benefits and additional plan features,” Rangecroft added.
Through open MEPs “and their cost-efficient institutional investment options and lower administrative costs, American workers at employers of all sizes and industries will reap the added value of these savings,” he said.