SECURE Act - your thoughts

[badatmath]

this would say yes, they are.

https://www.irahelp.com/slottreport/...ons-secure-act

[aaronc879]

Just got done reading the summary of the Act and it doesn't appear anything will have an impcat on me. Everything included in the bill seems reasonable. There are a few things that will help a lot of people save for a better retirement. Those things will cost money to implement so there is a new policy that will increase tax revenue so everything is paid for. Seems like a rare win/win. Some people on here will be negatively affected because they have a lot of money and/or their parents do and now taxes may be a little higher. Seems fair and reasonable to me though.

[Katsmeow]

Quote:

Originally Posted by ziggy29 Still trying to wrap my brain around it. I inherited an IRA from my mom when she passed in 2016. I've been taking RMDs at my life expectancy since 2017. It sounds like this means I have to clear it all out by 2026. But I still need to figure some things out. For example: * Does this mean I no longer have to take RMDs, but rather simply need to liquidate it by 2026? * Does this mean I can take I can take lumpy withdrawals through 2026, as long as it is liquidated by then? And does it even apply to existing inherited "stretch IRAs" or only to new ones? (In other words, are existing inherited IRAs already taking RMDs grandfathered into old rules?) I suppose while my wife is still working, I could work around this by taking larger contributions and offset it with corresponding increases to her 403B and/or HSA contribution. For example, I could withdraw (say) $10K in a year, and just increase her contributions to those plans by $10K so there is no real tax hit. [EDIT: Looks like most of what I am seeing suggests that inherited IRAs already in place by the end of 2019 can keep stretching, so there might be no impact on me.]

Were you able to find out the impact on existing inherited IRA's? I have a small IRA I inherited from my mother in 2018. I was planning to just keep taking RMD's from it.

[copyright1997reloaded]

Quote:

Originally Posted by aaronc879 Just got done reading the summary of the Act and it doesn't appear anything will have an impcat on me. Everything included in the bill seems reasonable. There are a few things that will help a lot of people save for a better retirement. Those things will cost money to implement so there is a new policy that will increase tax revenue so everything is paid for. Seems like a rare win/win. Some people on here will be negatively affected because they have a lot of money and/or their parents do and now taxes may be a little higher. Seems fair and reasonable to me though.

yes, "fair and reasonable" = no impact on you, **** those who are impacted.

ETA: This will likely cost my only heir hundreds of thousands of $.

[Gumby]

Quote:

Originally Posted by copyright1997reloaded yes, "fair and reasonable" = no impact on you, **** those who are impacted. ETA: This will likely cost my only heir hundreds of thousands of $.

Count your blessings. In my ideal world, the estate tax would be 100%, with no exemptions.

[ziggy29]

Quote:

Originally Posted by Katsmeow Were you able to find out the impact on existing inherited IRA's? I have a small IRA I inherited from my mother in 2018. I was planning to just keep taking RMD's from it.

The preponderance of the evidence I've seen suggests that existing stretch IRAs would be grandfathered. But I have not seen the details of the text of anything that may have come out of conference.

[pb4uski]

My thoughts.... meh.

I favor nipping stretch IRAs (to grandchildren and nieces and nephews and great-grandchildren) in the bud. At the same time 10 years is onerous, particularly for younger decedents... so the pendulum swung too far.

I would have favored allowing non-spouse beneficiaries to use the decendent's life expectancy from the IRS life expectancy tables based on the decedents age in the year of death.... this would have been more than 10 years in most cases but less than the 30+ years for grandchildren or great grandchildren, et al.

[Alexi]

Quote:

Originally Posted by RobbieB I'm spending the IRA down now. Spend now, avoid the rush later -

I've been strategically withdrawing from my taxable IRAs for the past several years to ease the future RMD tax burden. Under the SECURE Act, I will get an extra two years to continue to do so.

[Sunset]

Quote:

Originally Posted by Alexi I've been strategically withdrawing from my taxable IRAs for the past several years to ease the future RMD tax burden. Under the SECURE Act, I will get an extra two years to continue to do so.

I had the same thought, but realized it doesn't change much.
We'll still be getting SS at age 70 so that combined with IRA distribution plus dividends, interest, etc... is the dreaded tax torpedo.
Exactly like if I was taking an RMD.

The only difference I can see is that we can convert the IRA money to Roth, instead of having an RMD forcing us to withdraw it to taxable account.

So a small benefit unless we need to withdraw the money to live on, and then it's no different.

[audreyh1]

Surprise!

Man, I was just amazed at how just one or two senators could sit on a popular bill indefinitely......

Just didn’t seem right.

Quote:

There are situations where the 10-year rule won’t apply to a designated beneficiary — for so-called “eligible beneficiaries.” “EBs are: 1) Surviving spouse 2) Disabled 3) Chronically ill 4) Not more than 10 years younger than owner 5) Minor children,” Levine tweeted.

Beneficiaries who are less than 10 years younger than the deceased. That would seem to include my sibling beneficiaries. But not a couple of DH’s....

Was there some $400K provision/exemption somewhere?

[Tekward]

I was looking to verify the RMD to 72 change before I start adjusting spreadsheets. Helpful summary:
https://www.forbes.com/sites/jamieho.../#19aa278f3a4f

[Winemaker]

Quote:

Originally Posted by audreyh1 Surprise! Man, I was just amazed at how just one or two senators could sit on a popular bill indefinitely...... Just didn’t seem right.

Popular? It wasn't popular with me, and it isn't popular with my kids! The next shoe to drop in a few years will be the automatic conversion to national annuity, and no inheritance.

[audreyh1]

Quote:

Originally Posted by Winemaker Popular? It wasn't popular with me, and it isn't popular with my kids! The next shoe to drop in a few years will be the automatic conversion to national annuity, and no inheritance.

Popular as in strong bipartisan congressional support with a 417-3 passage in the house.

[Marc]

Quote:

Originally Posted by Alexi I've been strategically withdrawing from my taxable IRAs for the past several years to ease the future RMD tax burden. Under the SECURE Act, I will get an extra two years to continue to do so.

+1

[Telly]

Annuity salesmen prowl the halls of schools. With the "SECURE ACT", they can cut back the travel and prowl 401(k)s. Big big new hunting ground.

Love the naming of congressional bills... if one comes out that totally guts the Clean Air Act, it probably will have a moniker like "The Pure Air Act". After all, who would be against "Pure Air?"

[pacergal]

I do tend to agree with the basis of the SECURE Act.
After all, the purpose of IRA was to save money to fund my retirement, not to fund my children and future generations.
That's what investment accounts are for.

[DrBrisket]

Quote:

Originally Posted by audreyh1 Was there some $400K provision/exemption somewhere?

That was in the Senate version of the bill that went nowhere. The current version of the House bill has no such language. Still could change in getting the budget bill through the Senate and reconciliation--but who knows at this point.

[Which Roger]

Does the latest version include increasing RMD age to 72?

[pb4uski]

Quote:

Originally Posted by Which Roger Does the latest version include increasing RMD age to 72?

According to the Forbes article, yes.

Quote:

Today the law requires that most individuals take out required minimum distributions (RMDs) from their retirement accounts once you reach age 70.5. The SECURE Act would delay this requirement to age 72.

[pb4uski]

Quote:

Originally Posted by pacergal I do tend to agree with the basis of the SECURE Act. After all, the purpose of IRA was to save money to fund my retirement, not to fund my children and future generations. That's what investment accounts are for.

The author of the Forbes article agrees with you.

Quote:

The SECURE Act will make significant changes to inherited retirement plans like 401(k)s, traditional IRAs and Roth IRAs. In the past, beneficiaries of these accounts could typically spread the distributions over their own life expectancy. However, the new bill includes what is viewed as a tax-generating provision that would require most beneficiaries to distribute the account over a 10-year period. This change will accelerate the depletion of inherited accounts for many large IRAs and retirement plans. Typically, smaller inherited accounts are liquidated fairly quickly by beneficiaries already. However, the end of the so-called “Stretch” IRA or retirement account makes a lot of sense from a public policy perspective, especially after the Supreme Court has ruled that inherited accounts are not “retirement” accounts. As such, it does not make policy sense to allow for an extended tax benefit through the beneficiary’s retirement.