Did you know that the SECURE Act, which went into effect January 1, 2020, may affect your future retirement planning?

The Secure Act made many changes to retirement accounts:
• Prior to 2020, when an IRA account holder passed, their non-spouse heirs were able to distribute from the IRA over their life span based on the IRS-published life expectancy table. This is also known as “stretching the IRA”
• Under the SECURE ACT, inherited IRAs (non-spouses) must be distributed within 10 years
• Note: Spouses can inherit an IRA as a “treat-as-own,” meaning it becomes their IRA

This means that traditional tax-deferred accounts can potentially leave your non-spouse heirs with a large tax burden over a relatively short amount of time.

Potential solution: Convert the funds/assets into a Roth IRA and pay the taxes now so your heirs don’t have to pay later (speak to your CPA prior to taking any action).

Learn more about Roth Conversions:

Equity Trust Company is a directed custodian and does not provide tax, legal or investment advice. Any information communicated by Equity Trust is for educational purposes only, and should not be construed as tax, legal or investment advice. Whenever making an investment decision, please consult with your tax attorney or financial professional….(read more)

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