Benefits update: New legislation opens the door to greater retirement security

The new Setting Every Community Up for Retirement Enhancement (SECURE) Act signed by President Donald Trump went into effect Jan. 1 and brings changes to the retirement system to help more Americans save for the future, increase their savings and gain access to guaranteed income for life when they retire.

The primary changes that affect your Pacific retirement plan are:

• A later “begin date” for taking required minimum distributions (RMDs), now age 72
  This applies to both your pretax retirement plan accounts and IRAs. The previous age was 70½. If you were 70½ or older by Dec. 31, 2019, the old rules will still apply. The new rules will apply only to those who turn 70½ starting Jan. 1, 2020.
• Penalty-free withdrawals for births or adoptions
  This applies to both retirement plans and IRAs. The withdrawals are exempt from the usual 10% tax penalty and the money can also be repaid to the plan.
• A requirement to show you how your retirement account balance would translate into guaranteed monthly income
  TIAA statements already do this, but may be modified to follow a model disclosure developed by the Secretary of Labor.

TIAA is working with Pacific to comply with the new rules as details are provided from Washington. Additional information will be made available in the weeks ahead, and the TIAA website will reflect the new rules when they go into effect.

Additional rules that may apply to you:

• The 70 ½ age limit for contributing to traditional IRAs is eliminated.
• Beneficiaries who inherit a retirement account must take their RMDs within 10 years.
• If you are a graduate or postdoctoral student, you may include stipends or nontuition fellowship payments as “earned income” in order to qualify for IRA contributions.
• If you have money in an annuity within a retirement plan that is then removed from the plan, you will be able to move the money to other investments in the plan.
• If you are a long-term, part-time employee, you will be able to join Pacific’s retirement plan.

More information

To learn more about the new legislation, go to TIAA.org/secureact. For more information on understanding RMDs, visit the TIAA RMD resource page.