The SECURE Act has received much buzz since it was signed into law on December 20, 2019, as it will likely impact the retirement and estate planning strategies of many Americans.

The far-reaching law includes significant provisions aimed at increasing access to tax-advantaged accounts (e.g. IRAs, 401(k), 403(b), etc.) and preventing older Americans from outliving their savings.

Key Takeaways

Here are some of the key takeaways from an estate planning and retirement planning perspective:

  • The Act mandates that most non-spouses inheriting IRAs take distributions that end up emptying the account in 10 years
  • The Act pushes back the age at which retirement plan participants need to take required minimum distributions (RMDs) from 70½ to 72
  • The Act allows traditional IRA owners to keep making contributions indefinitely
  • The Act allows 401(k) plans to offer annuities
  • The Act allows parents to withdraw up to $10,000 from 529 plans to repay student loans

Given the changes brought about by the SECURE Act, it might be time to consider the following:

Review (and possibly revise) Your Estate Plan

It is important to establish an estate plan that meets your wishes and accomplishes your goals. It is also important for you to review and update your estate plan whenever there is a major change in your life or in the law. In this case, the major changes in the law resulting from the SECURE Act is a good reason to review your estate plan with an estate planning attorney who is experienced in the areas of tax law, long-term care, and retirement planning.

You should consider having a comprehensive retirement meeting with your estate planning attorney, financial advisor, and accountant when contemplating any changes to your estate and retirement plan. This will help ensure that all the relevant professionals are up to speed with your estate and retirement plan and can provide input related to their field of expertise.

Next week we’ll discuss beneficiary designations.

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