Our managing partner, Lynn St. Louis, was featured in the Journal of Business talking on the SECURE Act and what could it mean to you!
“The new federal SECURE Act makes it harder to sock away generational wealth on a tax-deferred basis, which creates the need to plan more carefully when giving or receiving an inheritance.
Prior to passage of the act last December, a stretch provision allowed beneficiaries of a traditional individual retirement account, in which money can be invested pre- or post-tax, to take required minimum distributions over the course of their lifetime, which meant the beneficiary paid less in taxes over the years.
Before the SECURE Act, the minimum distribution varied based on the account balance divided by a life expectancy factor that was age-dependent. For example, a 71-year-old was required to take out about 4%, while a 90-year-old was required to take out almost 9%.
Under the new law, those calculations are no longer necessary.
With the removal of the stretch provision due to the SECURE Act —which stands for Setting Every Community Up for Retirement Enhancement — nonspouse beneficiaries are required to drain the IRA within 10 years and will be taxed on the withdrawals.
Lynn St. Louis, founding partner of Spokane-based Elder Law Group PLLC, says the removal of the provision will affect significantly how people plan for retirement.”
Read the full article by Virginia Thomas here: https://www.spokanejournal.com/local-news/secure-act-takes-down-the-stretch/