How the Secure Act Screwed over millions?

 

SECURE Act Summary

  • Expands the ability to run multiple employer plans for plan years beginning after December 31, 2020
  • Safe Harbor Rules Simplified for plan years beginning after December 31, 2019
  • Long Term Part-time Workers permitted to participate in 401(k) plans, which applies generally to plan years beginning after December 31, 2020 
  • 3 consecutive 12-month periods the employee has at least 500 hours of service
  • Repeal Maximum Age for Making IRA Contributions which applies to contributions made for taxable years beginning after December 31, 2019 
  • Increase Age for Required Minimum Distributions to 72
  • Applies to distributions required to be made after December 31, 2019, with respect to individuals who attain age 7012 after such date

 

RMDs after Death under the Secure Act

  • H.R. 1865 – Sec. 401 Modification of Required Minimum Distribution Rules for Designated Beneficiaries
  • Basically, requires all IRAs and Qualified Plans to be distributed within 10 years of death
  • The Senate version had a 5 year limit

 

RMDs after Death under the Secure Act

Exception to 10-year rule for certain beneficiaries:

  • Surviving Spouse
  • Children under the age of majority (but only until reach age of majority, then 10-year rule)
  • Disabled
  • Chronically ill
  • Another individual who is not more than 10-years younger

 

Tacked onto last law to keep the government to

No more stretch IRA (including rotes) – only have 10 years. So much money disappear from average Americans.

Going after inheritance tax next? Back to Clinton days where it was 600k and over. Maybe do a roth conversion? Or get rid of all retirement funds like how I have been advocating for for a couple years now – SimplePassiveCashflow.com/qrp

You can contribute to qrp for last year until you file for next year

You can now have annuities in retirement plans – #Lobbist

 

roth conversions –

Charitable retainer trust – asset income goes to kids then goes to charity

Naming a charity as a beneficiary

Life insurance

A few others

 

Note: I personally don’t do retirement accounts because I want to take advantage if bonus depreciation – learn more here