- Feb 18, 2001
- 7,635
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IF you have a 401K and have named heir(s) to it, or IF you have parents/family who MIGHT be leaving you an inheritance this really affects you.
This has been passed as a benefit to future retirees. It raises the max age from 71.5 to 72 years in which you have to start taking a RMD from your 401K. It also pushes annuities HARD on the public (a bad thing). The killer for me is that IF you become deceased and leave any funds in a 401K ... the heir(s) are required to take all of the funds out within 10 years ... regardless of the tax damage. It appears that those looking out for us in Washington have decided that stretch IRAs are NOT good for the public. A stretch IRA allows an heir to continue to take distributions until their death. This is especially important for those of us leaving large sums to heirs who are unable to cope/budget their finances. Before Jan 1st, 2020, an heir could inherit a 401K and continue to draw (with hopefully lower taxes) forever. Now it is 10 years.
The gubment has to pay for the deficit somehow ... this really sucks!
This has been passed as a benefit to future retirees. It raises the max age from 71.5 to 72 years in which you have to start taking a RMD from your 401K. It also pushes annuities HARD on the public (a bad thing). The killer for me is that IF you become deceased and leave any funds in a 401K ... the heir(s) are required to take all of the funds out within 10 years ... regardless of the tax damage. It appears that those looking out for us in Washington have decided that stretch IRAs are NOT good for the public. A stretch IRA allows an heir to continue to take distributions until their death. This is especially important for those of us leaving large sums to heirs who are unable to cope/budget their finances. Before Jan 1st, 2020, an heir could inherit a 401K and continue to draw (with hopefully lower taxes) forever. Now it is 10 years.
The gubment has to pay for the deficit somehow ... this really sucks!
The SECURE Act is changing retirement — here are the most important things to know
The new law takes effect Jan. 1 and changes some rules about retirement savings.
www.marketwatch.com