The Setting Every Community Up for Retirement Enhancement (SECURE) Act, and what is popularly known as Secure Act 2.0, have made big changes to retirement plans. Both acts were focused on strengthening retirement security, but they’ve also significantly changed the way you may leave qualified plans to your loved ones. Two of the biggest changes that may affect our clients are changes to required minimum distributions (RMDs) and elimination of stretch IRAs for most non-spousal beneficiaries.
Qualified money typically is the most highly taxed money upon the death of a client – and for many clients, it’s their largest asset besides their primary residence. With the loss of the ability to stretch out the income tax burden of an inherited IRA over the lifetime of the beneficiary, one of the great planning tools for our wealthy clients just disappeared.
But there are alternatives that provide tax advantages, reliable retirement income, and protections for inherited IRAs.
Review your list of clients and prospects with IRAs. Some will need every penny for themselves during retirement. But others will only need a portion of the IRA funds, or have plenty of other assets and may never need to touch their IRA dollars. These are clients that would benefit from our IRA rescue ideas.
For more information, access our white paper, “Two Rescue Ideas You Should Implement Now”.
For additional assistance implementing these or other retirement or legacy planning strategies, contact our advanced planning team at advancedplanning@highland.com.