The Secure Act and Your Retirement

The "Setting Every Community Up for Retirement Enhancement Act" of 2019, better known as the SECURE Act, which originally passed the House in July, was signed into law on December 20 by President Donald Trump.

The SECURE Act will make it easier for small business owners to set up "safe harbor" retirement plans that are less expensive and easier to administer.Many part-time workers will be eligible to participate in an employer retirement plan.

The Act pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs), from 70½ to 72, and allows traditional IRA owners to keep making contributions indefinitely.

The Act mandates that most non-spouses inheriting IRAs take distributions that end up emptying the account in 10 years, and The Act allows 401(k) plans to offer annuities.

The landscape for building wealth in retirement plans and IRAs has changed dramatically after the SECURE Act passed. Individuals need to balance their personal needs with what they desire to pass on to children and future generations in an asset protected manner.

An important change to many is the removal of a provision known as the Stretch IRA, which has allowed non-spouses (your children) 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 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.)

It doesn't matter how much money you have, what matters is how you can pass it on to your beneficiaries. Suggestions will be made as to amendments to Revocable Trusts and the efficient, asset protected building of ROTH IRA assets.
Recorded March 17th, 2020

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