SECURE Act

Secure Act 1.0 Clarification and Secure Act 2.0

The Bird’s Eye View:

SECURE Act 2.0, son of the SECURE Act, has come out and we’ll explain what has changed, what you might like and what you might not.

 

Your Guide:

On this episode of Your Retirement Elevated podcast with Scott Dougan, we’re diving into the SECURE Act 2.0, which has some major changes, including an admission of a mistake by the IRS.

Anytime we can say the IRS has made a mistake and it’s in your benefit, we get excited about that. We want to build off the last podcast and what the IRS said they said they were going to do with the SECURE Act and why they retracted that.

In the last episode, we talked about what happens when you inherit an IRA. When the SECURE Act came out, it basically said you’ve got up to 10 year to have it drained out. Almost every expert and advisor were operating under the fact that we have a clock ticking for 10 years.

Well, the IRS came out and said no, it’s not that easy. We’re going to make you do a stretch IRA or make you do required minimum distributions for the first nine years and then you have to empty it out by the 10th year. That’s an administrative nightmare, and the whole industry was up in arms.

Lo and behold, the IRS came out and said we made a mistake. We interpreted that incorrectly. There was so much backlash that they had to come out and retract that.

To everyone reading this, if you have an inherited IRA, the original thought process is correct – you have 10 years to drain it out with no mandatory amounts within that 10 years. The IRS is doing this because it wants the deferred taxation inside of it.

That’s great news and it simplifies things.

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

[2:06] – SECURE Act 2.0

[5:16] – Rothification of retirement

[7:05] – Please some, frustrate others

[10:22] – Collecting tax on the seed

[12:22] – Increase RMD age

[15:54] – Don’t get too wrapped up

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

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

The Senate’s RESA Is Even Worse News For The Stretch IRA

The Bird’s Eye View:

On today’s show, we’ll follow-up on an earlier conversation about the SECURE Act’s impact on the Stretch IRA and talk about how the Senate’s plan (RESA) spells even greater doom for IRA owners with large balances. If you have a lot saved in an IRA and might pass it to a non-spouse beneficiary one day, this conversation better be on your radar.

Episode 21: https://yourretirementelevated.podbean.com/e/how-the-secure-act-might-impact-your-financial-plan/

Article: https://401kspecialistmag.com/will-secure-act-be-the-end-of-stretch-iras/

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact

How The SECURE Act Might Impact Your Financial Plan

The Bird’s Eye View:

Congress is in the middle of passing the SECURE Act (passed in the House, waiting on the Senate). The bill brings a lot of positive changes for those of us planning for retirement, but it also threatens the elimination of an important and well-used planning strategy, the Stretch IRA. Scott will break down this bill for us and talk about how it might impact our financial plans going forward.

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Click here to read a related blog post on the SECURE Act.

Your Guide:

Home Insight About Scott

Scott Dougan, RFC, Investment Advisor – Contact