[champion6]

The SECURE Act was recently signed into law. It might affect your retirement and that of your heirs.

Yahoo Finance: 5 Things Affluent Retirees Should Do Now that the SECURE Act Has Passed

Kiplinger: 10 Ways the SECURE Act Will Impact Your Retirement Savings

[rustyp]

Originally Posted by champion6

The SECURE Act was recently signed into law. It might affect your retirement and that of your heirs.

Yahoo Finance: 5 Things Affluent Retirees Should Do Now that the SECURE Act Has Passed

Kiplinger: 10 Ways the SECURE Act Will Impact Your Retirement Savings

Is there any item here of significance to a retiree (already 65+) in our typical TV environment other than delay RMD from 70 1/2 to 72 ? Did they modify the percentage table for those minimum withdrawals as a result of the age change ?

[kaseydog]

as per my cpa you don't have to take rmd til 72. also the tables listing distributions have been slightly adjusted to reflect people living longer.

[tophcfa]

Sounds like a good thing. Can still take withdrawals without penalty starting at 59 1/2 if needed but not required to take withdrawals as soon if not needed. It's not often changes in laws/regulations/requirements effect seniors in a potentially positive way, so all good on this one unless I am missing something.

[pauld315]

Sounds great, I won't have to take RMD now until I am 72 !

[CoachKandSportsguy]

The biggest change for resident's of the villages is the RMW extension to 72. The downside is more for the heirs of your retirement account/s. Heirs of retirement accounts have a much shorter time period to exhaust the account. Assuming that your financial assets are in trusts, which pass mostly tax free to the beneficiaries, the best answer is to draw down the retirement account first before using any taxable income for expenses to avoid heirs having to pay additional income taxes

[Schaumburger]

Originally Posted by CoachKandSportsguy

The biggest change for resident's of the villages is the RMW extension to 72. The downside is more for the heirs of your retirement account/s. Heirs of retirement accounts have a much shorter time period to exhaust the account. Assuming that your financial assets are in trusts, which pass mostly tax free to the beneficiaries, the best answer is to draw down the retirement account first before using any taxable income for expenses to avoid heirs having to pay additional income taxes

The SECURE Act eliminates the current rules that allow non-spouse IRA beneficiaries to "stretch" required minimum distributions (RMDs) from an inherited account over their own lifetime (and potentially allow the funds to grow tax-free for decades). Instead, all funds from an inherited IRA generally must now be distributed to non-spouse beneficiaries within 10 years of the IRA owner's death.

This means that if my sisters and I inherit any money from my father's IRA, we will have to take distributions within 10 years of his death -- correct? I am assuming these distributions would be taxable income -- correct? My sisters and I are all still working full-time if that makes a difference.

[collie1228]

To me the real reason for the government to enact the Secure Act was to get their federal income tax dollars earlier. It's a big deal that your non-spouse heirs now have only ten years to fully liquidate an inherited IRA (in other words, ten years for the government to collect it's taxes).

[Boomer]

I do not know what is wrong with me, but I can never resist a discussion of taxes. I can make some people’s eyes glaze over when I get all interested in such talk.

I am not a financial advisor or a CPA. But I just want to say that some of you might want to take a closer look at what this change could mean.

Yes. Raising the age for the RMD certainly can feel like a reprieve for some, like bonus years to let your IRA be untouched. But if you are not there yet, you might want to run some numbers to see if you could be missing a current opportunity. For some, it could make sense to get in some conversions to Roth before your pay-the-piper birthday.

A look at tax-brackets might be a good idea. Do you have room to pay extra now or is a guess about later the way to go?

Roth conversion after reaching RMD age can be more of a hassle or a hit because the RMD must be taken first before doing a conversion. (Don’t forget to look into using a QCD as your RMD — if you are charitably inclined and the tax advantages could work in your favor — especially now when itemizing is not as prevalent — but that’s a different topic, sort of.)

Anyway, even if not worrying about protecting non-spousal heirs, doing Roth conversions along the way to RMD age can be a way of helping yourself to lessen your own future tax hit. Not always. But sometimes. Pay now? Pay later? But Roth conversions could be an opportunity worth looking into while you wait for those extra couple of candles on your cake.

If my thoughts on this matter interest you, please get some professional advice. Mine is worth exactly what you are paying for it.

Btw, the OP, champion6, has given us some good links.

[retiredguy123]

Note that the new RMD rules are more advantageous for people whose birthday occurs in the first half of the year, January 1 to June 30. Those people can delay taking their first RMD for two additional years (as compared to the old law). But, people whose birthday occurs in the second half of the year can only delay their first RMD for one additional year. Bummer.

[dewilson58]

The Act is a non-event.

[Boomer]

Originally Posted by dewilson58

The Act is a non-event.

Huh?

Quite dismissive.

I don’t get why the blanket statement. There could be situations in which just the opposite could come true.

All my post was intended to do was to encourage anyone (who wants to) to look a little closer at the potential to maybe save some future taxes — if they choose to learn more, that is. Individual choices — and situations, of course, will vary.

Sincerely,
Just-Trying-To-Be Helpful Boomer

[Fredman]

Originally Posted by Schaumburger

The SECURE Act eliminates the current rules that allow non-spouse IRA beneficiaries to "stretch" required minimum distributions (RMDs) from an inherited account over their own lifetime (and potentially allow the funds to grow tax-free for decades). Instead, all funds from an inherited IRA generally must now be distributed to non-spouse beneficiaries within 10 years of the IRA owner's death.

This means that if my sisters and I inherit any money from my father's IRA, we will have to take distributions within 10 years of his death -- correct? I am assuming these distributions would be taxable income -- correct? My sisters and I are all still working full-time if that makes a difference.

You will have to pay taxes on the money you withdraw.

[CoachKandSportsguy]

One other interesting observation of the SECURE act is that there is a restored credit for energy efficient equipment installed in personal residences. So if you are thinking about SOLAR installations, and payback, this year may get a better ROI or shorter payback period

2019 & 2020 Energy Tax Credits
There are significant “Renewable Energy Tax Credits” for up to 30% of the costs of major energy installations. These credits are unlimited, and include labor on installation for the following:
solar water heaters
solar panels
geothermal heat pumps
small wind turbines
fuel cells
The 30% credits decline through 2021, and are as follows:
2019: 30%
2020: 26%
2021: 22%
The installations must be installed in a home you own and use as a residence (no rentals, but second homes qualify).

[dewilson58]

Originally Posted by Boomer

Huh?

Quite dismissive.

I don’t get why the blanket statement. There could be situations in which just the opposite could come true.

All my post was intended to do was to encourage anyone (who wants to) to look a little closer at the potential to maybe save some future taxes — if they choose to learn more, that is. Individual choices — and situations, of course, will vary.

Sincerely,
Just-Trying-To-Be Helpful Boomer

There are minor items in the Act, but there is a lot of media and advertising to generate consulting dollars.


Not critical of your information.


Just not seeing significant changes / impacts from the Act.