The Secure Act: A new law and its impact on retirement accounts and your estate plan

Congress passed the Secure Act effective January 1, 2020. The provisions of the Act will have a significant impact on your life, your taxes, and the lives and taxes of your loved ones.

Among other changes, the Secure Act brought about the following:

1. Eliminated the “stretch” option for inherited IRAs. (A beneficiary used to be able to stretch a payout from a tax-deferred retirement account over his or her lifetime, but now the entire payout must be completed within a 10-year period.) This change will require the distributions to be taxed to the beneficiary over a 10-year period instead of a lifetime, thereby accelerating the payment of income tax on those assets and decreasing the amount available to them for their support long-term.

2. Increased the age for RMDs (required minimum distributions) from 70½ to 72.

The good news is there are strategies available to eliminate the potentially hefty tax implications of the new law. For nearly all of our clients, this new law will require changes to estate plans as they pertain to beneficiary trusts and distributions from those trusts. We are also amending our own estate plan documents to bring them in line with our planning objectives under this new law.

We will begin to conduct retirement and beneficiary analysis meetings in order to make any necessary changes to our client's estate plans.

All RRPG clients should be on the lookout for a letter inviting them to meet with us to discuss the Secure Act as it pertains to their personal estate plans. If you do not receive a letter by the end of January, 2020, please contact our office at 614-760-1801 to schedule this meeting.

We look forward to speaking with you about these new changes in the law and how we can continue to help you plan for bright tomorrows.