The Secure Act and What It Means for Retirees and Their Taxes

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The Secure Act and What It Means for Retirees and Their Taxes

Rocklin, California – September 8, 2020 – If you are retired or approaching retirement, the recently signed SECURE Act may have a considerable effect on your retirement or how you plan for it. As most of the provisions of the new law went into effect in 2020, you’ve likely heard about a couple positive changes, which are great.But what about the changes that affect your tax and estate planning? Leaving your estate unchecked, could lead to a significant hit to your financial well-being.

“I think pre-retired and retired Americans need to look at mitigating Federal and State taxes if they want their nest egg to last a lifetime. The Secure Act has had a major impact on retirement planning, and it seems like no one is talking about it. We took time in January of 2020 to talk about the change with our clients and started making adjustments to their overall estate plan to ensure the new act was considered. With ever changing tax codes, estate laws, and new legislation, its important to be working with a team that understands these changes and can adapt your estate to keep it protected. If you have heirs to your estate and want to mitigate their tax burden, take the first step by meeting with a professional,” says Adam Hultman, Regional Vice President of Gold Coast Financial & Insurance Services, LLC.

Here is how the new act may affect your financial well-being –

Required Minimum Distributions Start at age 72

The first change included in the legislation provides retirees with more time before they are required to start taking distributions from their tax-qualified accounts such as 401(k)’s, IRA’s, and 403(b)’s. Prior to the changes, retirees were required to start taking these distributions at age 70 ½. Now distributions are not required to begin until age 72.

IRA Contributions Allowed after the Age of 70 ½

Would you like to work into your 70s and still put some money away for your retirement?If that is the case, now you can.As of the start of this year, you can also contribute to your traditional IRA provided you have earned income in the year you turn 70 1/2.

Inherited IRA Distributions to be taken within 10 Years

One of the most impactful changes included in the SECURE Act, is its elimination of the “Stretch IRA.” In the past, if you inherited a 401(k) or an IRA, you could “stretch” your distributions as well as tax payments out over your single life expectancy.  However now if you an inherit an IRA from an original owner who has passed away either on or after January 1, 2020, the SECURE Act requires you to withdraw assets from the inherited 401(k) or IRA within ten years after the death of the original account holder, causing a potentially higher tax burden.

There are some exceptions to this 10-year rule. These include assets left to a minor child,a surviving spouse, a beneficiary who is less than ten years younger than the original IRA owner or a chronically ill or disabled beneficiary.

By eliminating the inherited stretch IRA, tax revenue will significantly increase on trillions of dollars. It’s in your best interest to do tax planning both before and during retirement.You have multiple options when it comes to keeping control of what you have worked so hard to create. 

Work with a Professional to Understand the Changes and their Impact on Your Retirement

Not sure what these changes mean for you or your retirement plans? It is important to work with a financial professional who specializes in retirement and can help you navigate these new changes.

“At Gold Coast Financial and Insurance Services, LLC, our process ensures a multi-level planning approach that averts risks for our clients that otherwise could lower their retirement income and assets. This process allows us to build a protection plan against unnecessary risks, create income that lasts for a lifetime, implement tax-efficient strategies, and leave a legacy for their heirs,” said Hultman.

About Gold Coast Financial & Insurance Services, LLC.

Gold Coast Financial and Insurance Services is a retirement planning firm in California. The firm takes a thoughtful and proactive approach when designing estate and retirement plans. The firm’s mission is to offer first-class service and reliable advice for individuals, businesses, and families by developing a long-term partnership that adds value to all aspects of their clients’ financial lives.

Advisory Services offered through ARP Advisors, LLC. A Registered Investment Advisory Firm. Insurance products are offered through Advanced Retirement Planning, LLC, and Gold Coast Financial & Insurance Services, LLC. Professionals from Advanced Retirement Planning LLC, Gold Coast Financial & Insurance Services, LLC, and ARP Advisors, LLC, may transact business in states where properly qualified and licensed. Tax and legal advice is offered through Estate & Elder Law Services, LLC. Adam Hultman is registered with the California Tax Education Council as a licensed CTEC. ARP Advisors, LLC, and Advanced Retirement Planning, LLC, are affiliated companies. Estate & Elder Law Services, LLC, is not affiliated with Advanced Retirement Planning, LLC, nor ARP Advisors, LLC. Advanced Retirement Planning LLC operates as Gold Coast Financial & Insurance Services, LLC in the state of California.

Media Contact
Company Name: Gold Coast Financial & Insurance Services, LLC.
Contact Person: Adam Hultman
Email: Send Email
Phone: 916-580-9484
Address:6520 Lonetree Blvd
City: Rocklin
State: CA 95765
Country: United States