The SECURE Act
What IRA Holders Should Know
What’s the Focus of the Act?
► Modifies RMD rules for retirement plans
► Provides broader access to retirement plans
► Increases lifetime income options in retirement plans
The Key Impacts
RMD START DATE EXTENDS BY 2 YEARS
The Required Minimum Distribution (RMD) start date extends by two years, from age 70½ to 72 years. So, your IRA investment will get two more years to grow.
MORE ROTH PLANNING OPPORTUNITIES
Because the RMD starts at age 72, you can do Roth conversions for the additional two years without any impact of distributions.
ADDITIONAL SAVINGS OPPORTUNITIES
You can contribute to a tax-deductive IRA after you hit 70½ years of age. If you continue working in your 70s, you have the option to put money in a deductible IRA.
LIFETIME INCOME FROM RETIREMENT PLANS
Employers with retirement saving plans are encouraged to allow their employees to convert their retirement savings into guaranteed lifetime income, through annuities.
REASON TO REVIEW BENEFICIARY DESIGNATIONS
You have to review the beneficiary designations of your IRA to ensure that they align with the new beneficiary rules, which mandate IRA beneficiaries to distribute all of their inherited IRA within 10 years of the death of the owner (with a few exceptions).
REASON TO REVIEW TRUSTS (As Beneficiaries)
You should review the terms and conditions of any trust as a beneficiary of your IRA, if you have any, to ensure they align with the new rules. Because the Act mandates that all of the money in the IRA has to be withdrawn in 10 years after the death of the owner, the beneficiary trusts will not be able to stretch out the tax benefits of the inherited IRA.
Disclosure: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Versant Capital Management, Inc.), or any non-investment related content, made reference to directly or indirectly in this article will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this article serves as the receipt of, or as a substitute for, personalized investment advice from Versant Capital Management, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Versant Capital Management, Inc. is neither a law firm nor a certified public accounting firm and no portion of the article content should be construed as legal or accounting advice. If you are a Versant Capital Management, Inc. client, please remember to contact Versant Capital Management, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Versant Capital Management, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.