The SECURE Act – RMD & Inherited IRA Surprises

What’s the latest news about the SECURE Act and inherited IRAs? The SECURE Act was the death of the stretch IRA. Previously, inheritors were allowed to stretch out the withdrawals of the inherited IRA over their life expectancy. The SECURE Act that was enacted at the beginning of 2020 changed things to the 10-year rule. But is it what we thought it was?

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The View From The Pinnacle

After the SECURE Act changed inherited IRAs last year, what do we really need to know? How will it impact your tax planning and retirement plans?

Click the timestamps below to fast forward to certain points of the episode.

 

Thing’s You’ll Learn Along Today’s Journey

What’s the latest news about the SECURE Act and inherited IRAs? The SECURE Act was the death of the stretch IRA. Previously, inheritors were allowed to stretch out the withdrawals of the inherited IRA over their life expectancy. The SECURE Act that was enacted at the beginning of 2020 changed things to the 10-year rule. But is it what we thought it was?

The IRS recently put out 590-B, which prompted articles from financial experts such as Ed Slott who clarified the surprise further. The RMDs now will be expected the first nine years based on your life expectancy and then the rest of it will have to be taken out in the tenth year. So, if you have an inherited IRA, you will really need to be strategic to alleviate taxation in the future.

What ways can you prepare for this? How might it impact your taxes if you’re still working and in your highest tax bracket? Will it affect your Medicare premiums or Social Security?

Spend some time meeting with a number of financial advisors if you don’t have one yet that you work with and trust. Tax planning is a big focus for Sean and his team. Can you see a plan on how you’ll be taxed now and how you might be taxed in five or ten years? There’s a mathematical amount that you should pull out from your inherited accounts in order to alleviate your taxes and be as streamlined as possible as time goes on.

Listen to the entire episode or click on the timestamps below

0:20 – Sean is living the spring dream.

1:20 – The RMD rule in the SECURE Act is not what you think.

2:36 – What is the new rule?

5:04 – What happens if someone leaves you money in your prime income years?

7:05 – Are you tax planning?

8:45 – What questions should you ask your advisor?

 

Looking Back From The Mountaintop

You can control how you plan or you can allow the government to control how your plan in built..

-Sean Lee

 

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MEET YOUR HOST...

For over a decade, Sean Lee has helped families reach and maintain their financial goals. As a trusted advisor, he coaches and assists his clients with their financial goals by focusing on the fundamentals and takes a practical and personal approach when working with them.

As a trusted professional in Utah, Sean has been featured in The Wall Street Journal’s Market Watch, The Deseret News, The Salt Lake Tribune and USA Today. He has also been featured as a local financial advisor on Utah’s NBC station, KSL 5.

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