With all the chaos of 2020, the passing of the SECURE Act didn't register on many people's radar. This change in legislation made two important changes that impact retirement planning:
- Required Minimum Distributions (RMDs) were pushed back from age 70 1/2 to age 72. This allows you to defer taking distributions out of your retirement accounts if you do not need the income.
- The much more significant change is the elimination of the stretch IRA. Rather than allowing non-spouse beneficiaries to stretch inherited IRA withdrawals over their lifetime, they now have to pay tax on the entirety of the balance within 10 years. This change will result in larger than necessary tax bills and less of your money ending up in the hands of your family.
For individuals with larger IRAs, we encourage you to revisit your estate plan and beneficiary listings. By taking proactive steps today, you can:
- Create larger inheritances
- Maintain more post death control
- Pay less in tax
I included an article below outlining the changes in the SECURE Act. If you have any questions about how this impacts your situation, please let me know.