EPISODE #044

SECURE ACT & RESA: New IRA Rules on the Way

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SECURE ACT & RESA: NEW IRA RULES ON THE WAY

In this episode, John discusses two new bills that have been passed in Congress. When they are reconciled and put into law, they will have repercussions for IRA planning.

John is the author of 5 Ways Your Wealth is Under Attack. He has lectured at various educational institutions such as John Hopkins, Haas School of Business, UC Berkeley and UNC Chapel Hill. He has consecutively received the Five StarSM Wealth Manager Award since 2011, and is the former president and chairman of the Rotary Club of Red Bank Foundation.

John’s strength lies in his ability and commitment to continually improve the level and quality of the financial planning process. His macro view approach and dedication to his clients’ growth involves an evolving strategy that strives to meet the demands, desires, and needs of his clients in a continually changing economic environment.

Don’t miss these takeaways:

  • New legislation will bring both benefits and drawbacks to retirees and beneficiaries of retirement plans. Most notable are changes to IRAs.
  • The House’s SECURE Act (Setting Every Community Up for Retirement Enhancement):
    • Changes the stretch (the period of time during which a non-spouse beneficiary receives payouts) from five years to ten.
    • Pushes the age of required minimum distribution (RMD) from 70 ½ to 72.
  • The Senate’s RESA (Retirement Enhancement and Savings Act):
    • Keeps the stretch limit at five years for non-spouse beneficiaries.
    • Pushes the RMD to 75.
  • Possible benefit to retirees: If they push the RMD two or five years from the 70 ½ (depending upon what variation of this bill gets passed into law), in theory, this creates more money in the qualified plan. Depending on the rules they use to calculate the RMD, that could create a higher RMD at 72 or 75.
  • Possible drawbacks to non-spouse beneficiaries: If they are required to pull all of the money out over a 10-year period, if there’s more money in the IRA, it could force them into a higher tax bracket and they would pay a significantly higher tax than they’re paying now.

We’ll have to wait for the SECURE Act and RESA to be reconciled, which may happen by the end of the calendar year. In the meantime, we need to spend some time reviewing how they could impact IRA planning. We may need to rethink how you should take money out of an IRA, how it comes out, and how your beneficiaries will be impacted.

For details, listen above. For more information about this or any other aspect of wealth planning, come in and talk to us. To set up a Wealth Curve Conversation, visit us and click the “let’s get started” button. Call us at (800) 797-1000. You can connect with us on all the social media platforms, too.

I hope to hear from you soon.


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