Stretch IRA’s, RMD’s, Inherited IRA’s , QCD’s and IRA penalty free distribution exception for IRA.I’ll give you an explanation of the 5 parts of the new law that are most likely to impact your finances.
RMD changes and Stretch IRA is dead.

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The SECURE Act, which came into effect on January 1, 2020, introduced significant changes to retirement planning. One of the most significant changes is the elimination of the Stretch IRA provision. This provision allowed non-spouse beneficiaries of an IRA to stretch out distributions over their lifetimes, significantly reducing the tax burden on inherited IRAs. However, under the new SECURE Act, non-spouse beneficiaries must distribute the entire IRA within ten years of the original owner’s death.

This change has far-reaching impacts on estate planning, especially for those with larger IRAs. Prior to the SECURE Act, IRA owners could use a stretch IRA as a tool for passing on wealth to their beneficiaries. Under the new law, planners must adopt different strategies to achieve the same outcomes, potentially involving Roth conversions or the use of trusts.

Another significant change resulting from the SECURE Act is that it removes the age limit for making traditional IRA contributions. Under the previous rules, an individual could not contribute to a traditional IRA once they reached the age of 70½. Now, individuals can continue to make contributions for as long as they have earned income in the year, regardless of age.

The SECURE Act also increased the age at which required minimum distributions (RMDs) must begin. Prior to the law’s enactment, IRA owners and beneficiaries had to take RMDs by the age of 70½; now, they can defer these distributions until age 72. This change aims to give individuals more time to accumulate assets and avoid the impact of taxes on the distributions.

Finally, the SECURE Act has made changes to how deceased IRA owners’ beneficiaries handle RMDs. Under the previous rules, beneficiaries could use their lifetimes to stretch out distributions. However, under the new law, beneficiaries must take the full RMD within ten years to avoid penalties.

In conclusion, the SECURE Act has brought about significant changes in retirement planning, particularly regarding inherited IRAs. Individuals and planners alike should review their estate plans to ensure they are using the most effective strategies to minimize taxes, maximize retirement savings and provide for future generations.