![]() The Secure Act (Setting Every Community Up for Retirement Enhancement) is the broadest piece of retirement legislation passed in 13 years, in an effort to address the alarming fact that 25% of Americans have no retirement savings at all. It may appear at first glance that many of the provisions may not have a direct effect on your situation. However, there can be tax, estate planning and income planning considerations. The Secure Act (Setting Every Community Up for Retirement Enhancement) is the broadest piece of retirement legislation passed in 13 years, in an effort to address the alarming fact that 25% of Americans have no retirement savings at all. It may appear at first glance that many of the provisions may not have a direct effect on your situation. However, there can be tax, estate planning and income planning considerations.
One key change in the new bill is paying for all of this: the removal of a provision known as the stretch IRA, has allowed non-spouses inheriting retirement accounts to stretch out disbursements over their lifetimes. The new rules will require a full payout from the inherited IRA within 10 years of the date of death of the original account holder, raising an estimated $15.7 billion in additional tax revenue. (This will apply only to heirs of account holders who die starting in 2020.) Surviving spouses, minor children, and those not more than 10 years younger than the deceased, are generally exempt from the 10 year payout. We advise all our clients to review their IRA beneficiary designations, as well as review their estate plans, to discover any unintended consequences from prior estate planning. We will also include this topic in our first quarter conversations with clients. As always, we are happy to receive your questions. For Individuals
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