We’re nearing a critical time for many Individual Retirement Account (IRA) owners. Advance IRA planning will be imperative if you want to maximize the after-tax value of your IRA for heirs and avoid the new tax burden Congress has in mind.
As I explained last month, despite the deadlock and division in Washington, the Setting Every Community Up for Retirement Enhancement (SECURE) act moved through the House of Representatives by a vote of 417 to 3 in May. A version of it is likely to pass the Senate and become law later this year. The SECURE Act and its Senate counterpart have a number of provisions designed to expand retirement savings opportunities and would delay required minimum distributions (RMDs).
To make up for the lost tax revenue, the SECURE Act and the Senate version would end the Stretch IRA. The Stretch IRA is a strategy in which children who inherit an IRA make maximum use of the tax code to minimize distributions for years. In many cases, the RMDs are less than the investment return of the IRA, so the IRA not only lasts for decades but increases in value. Under the SECURE Act, beneficiaries (other than minor children and a few other exceptions) would have to distribute and pay taxes on an inherited IRA within 10 years, even Roth IRAs.
One quarter of the Baby Boom generation expects to work until they die...
For Americans ages 46-55, having enough money to retire is among their most pressing worries.
As a medical doctor, I can tell you that if you’re relatively healthy right now and a nonsmoker, you could live a lot longer than the averages. How long? It’s impossible to say. There are just too many variables. And that leads to important questions:
That’s why I’m going to lift the veil on one of the most misunderstood secrets of the wealthy... annuities.