The SECURE Act (Setting Every Community Up for Retirement Enhancement Act) is going to change some things for retirees. This is the largest piece of retirement legislation passed since 2006. I plan to devote an entire article to the topic, but here are the two primary issues that will impact planning for retirees:
- The age for Required Minimum Distributions if going UP from age 70.5 to 72. This is a great thing offering retirees more flexibility in distribution planning.
- The Stretch IRA provision benefits for non-spouse beneficiaries is changing. Non-spouse beneficiaries will now be required to withdraw the entire balance from the inherited IRA within 10 years. Many of these IRAs will be inherited while the beneficiaries are in their peak earning years resulting in higher overall taxes due. Good for the government, bad for tax-payers.
These two issues alone are going to impact income distribution planning, Roth conversion strategies, estate planning, how soon-to-be retirees are currently saving, and more.
- Big Overhaul Set for IRAs Could Be More or Less Taxing from Tim Grant
Other Recommended Reading
- IRS Proposes New RMD Life Expectancy Tables to Begin in 2021 from Jeffrey Levine
- The News is Decidedly Mixed, But It’s Not Crazy to Remain Optimistic from Scott Grannis
- Avoid the Tax Trap Most Couples Don’t Want to Think About from Nathan Tiarks
- The Best Investment You Can Make from Nick Maggiulli
- Mapped: The 1.2 Billion People Without Access to Electricity from Nick Routley
- A Day in the Life of Americans (fascinating visual) from Nathan Yau
Thanks for reading and hope you enjoy the holidays!
This is not advice. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person’s situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Please see additional disclaimers.
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I am a Financial Advisor in Pittsburgh and a CERTIFIED FINANCIAL PLANNER™ professional with Shorebridge Wealth Management. I enjoy helping clients and readers find sensible answers to retirement’s big questions. If I can answer any questions for you, feel free to Contact Me or if you think you might be a fit for our practice, see Who We Serve.