Well fellow advisors, I came across another amazing Tweeter thread that is important to save and not let it get buried. This time it is from Jeff Levine, CPA/PFS, CFP® regarding the SECURE ACT.
Jeff did an amazing job distilling many of the important parts for financial advisors. Thanks, Jeff! And now your tweet is permanently stored here for advisors to come back to and find it. Below you will find a few of his extensive thread - best to click the link and read the entire thread which contains so much information.
Advisors, if you come across other tweets or information that you feel should be preserved somewhere, message us.
1/💩ton— Jeff Levine, CPA/PFS, CFP® (@CPAPlanner) December 17, 2019
OK, kids are finally asleep, so it's time to nerd out on the SECURE Act for a little bit (i.e. the next few hours). Buckle up...
Let's start w/ the big news... the 'Death' of the 'Stretch'. In fairness, it isn't dying a complete death...
2/— Jeff Levine, CPA/PFS, CFP® (@CPAPlanner) December 17, 2019
It's just that MUCH fewer people will qualify to be able to stretch distributions. Instead, most new (more on this in a bit) designated beneficiaries will have to empty inherited retirement accounts by the end of the 10th year following the year of death.
13/— Jeff Levine, CPA/PFS, CFP® (@CPAPlanner) December 17, 2019
Ok, let's switch gears up and talk about the very first Section of SECURE, which deals w/ MEPs. Many advisors are not super-familiar w/ them, but if you're not, you should do yourself a favor and do it QUICK. They're about to get a lot more popular.
17/— Jeff Levine, CPA/PFS, CFP® (@CPAPlanner) December 17, 2019
Imagine building your own super-tricked-out, low-cost, bad-ass 401(k) that you can offer to any biz you work w/ (or that wants to work w/ you).
You can have 1 big MEP for everyone! Streamlines things for advisors, which SHOULD lead to cost efficiencies for end-clients.
SECURE Act FAQs
Can I still do a stretch IRA if someone died in 2019?
Yes. If the person who had the IRA passed away in 2019 (including December 31st, 2019), the beneficiary can stretch to their lifetime.
What if there is a trust as a beneficiary?
You should always review your beneficiaries. With the SECURE Act, this is now an important step as depending on the type of trust, it could be disadvantageous to your and your heirs.
What about spousal beneficiaries?
There are few exemptions who can continue to benefit from the lifetime IRA stretch.
+ Spousal beneficiaries
+ Disabled beneficiaries
+ Chronically ill beneficiaries
+ Individuals who are not more than 10 years younger than the decedent
+ Certain minor children of original retirement account holder, but only until they reach the age of majority.
For more comprehensive coverage, visit Kitces.com blog.