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The Secure Act Eligible Designated Beneficiaries

Before the Secure Act, an IRA beneficiary could use the Life Expectancy Rule. Under the Life Expectancy Rule, he an IRA beneficiary could keep his inherited IRA invested for his lifetime subject to Required Minimum Distributions (RMD). Every year, the beneficiary would have to take a RMD based on his life expectancy. The younger the beneficiary, the less the distribution. The distribution would be taxable as income. But the balance of the…

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The Rules Have Changed Under the Secure Act: The Ten-Year Rule Replaces the Life Expectancy Stretch-Out

The primary feature of a retirement plan is that it can grow tax free. But when the owner is a certain age, previously age 70 ½, but under the Secure Act effective January 1, 2020, age 72, the owner must withdraw Required Minimum Distributions (RMD). The RMD is based on the owner’s age and the IRS mortality tables. Simply put, once you hit the required age, now 72, the IRS makes you…

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Congress May be Changing Your Retirement Plan

Congress may actually be passing legislation. In May 2019, the House of Representatives passed, by a 417-3 margin, the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019. The Senate has not yet voted on a similar bill, the Retirement Enhancement and Savings Act (RESA). If the House and Senate reconcile and pass the bill and the President signs it, I'm proposing a new name (WTFGSD) When They Finally Got…

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