Month: April 2021

Critical Facts: SECURE Act’s RMD Rule Not What You Thought

The Bird’s Eye View:

We’ve got some news for you. There have been some recent developments in provisions of the SECURE Act. Find out what we think about the news and how it could impact planning.

 

Your Guide:

On this episode of Your Retirement Elevated podcast with Scott Dougan, we’re talking about some recent developments to the SECURE Act and what it might mean for you.

The SECURE Act started Jan. 1, 2020, and was a revision of some of the IRS rules of how to handle IRAs. There were some great provisions to help Americans save, but they also took away some of the strategies people use to minimize taxes.

In the new 2021 version, the IRS talks about post-death distributions to IRA beneficiaries. The big change is they eliminated the stretch IRA for most non-spouse beneficiaries.

Now you’ll have to start taking required minimum distributions after the death of the owner. Every year you have to calculate the value and figure out how much to take out to satisfy the required minimum distribution. By year 10 you have to empty it out.

This becomes an accounting and record keeping issue for a lot of people. If you fail to take out the right amount, there’s a penalty, and it’s a 50% penalty of the amount you’re required to take out. So, if you’re supposed to take out $10,000 and you don’t, you’ll be penalized $5,000.

So, how could this affect you? I would tell you to take a deep breath. The IRS has not introduced official regulations yet. This could all change depending on how the IRS receives the feedback. I would say hold tight. Don’t get worried or concerned.

Listen to the full episode or use the timestamps below to find specific segments.

[2:42] What is the SECURE Act?

[6:34] – Withdrawing funds from retirement accounts

[11:20] – Not the first big change

[13:36] – Repercussions

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact

Don’t Make These Assumptions About Retirement

The Bird’s Eye View:

There are some things you should never assume in the financial world, especially as you’re preparing for retirement. Find out if you’re getting any of these things wrong.

 

Your Guide:

On this episode of Your Retirement Elevated podcast with Scott Dougan, we’re talking about some of the wrong assumptions people make about their finances, especially as they’re preparing for retirement.

I’ll spend less in retirement

People often think they’ll spend less in retirement, but that’s not always the case, especially in the first five years after you leave the working world. Many people are traveling, playing golf, taking cruises, etc. and those things cost money.

“Will your plan support the lifestyle you want to live in retirement?” said Scott.

My taxes are going to be lower when I retire

If you retired in 2018 or beyond, that’s true, but it’s very rare and it’s the first time it’s happened in 30 years.

Tax rates are at historic lows. Considering the stimulus money and other entitlement programs, we’ll likely pay for that later with taxation.

I should help my children with college and worry about saving for retirement later on

You want to be there to help your kids. The problem is, to what degree do you help them? There’s no such thing as financial aid for retirement. Make sure you’re not sabotaging yourself in the process.

Listen to the full episode or use the timestamps below to find specific segments.

[7:41] – Spending less in retirement

[9:26] – Lower taxes in retirement

[11:12] – Helping children with college

[13:34] – I’ll never retire

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact