February 4, 2020

Is Retirement Planning Getting More SECURE? Think Again!

The SECURE Act, which took effect on January 1, 2020, has radically changed the landscape for estate planning related to 401Ks, IRAs and other retirement assets.  With only a few exceptions, it does away with the so-called “stretch IRA” which for years has been a popular way to pass retirement benefits to successive generations of beneficiaries, often children and grandchildren.  Up until this year, beneficiaries of inherited retirement accounts could stretch the distribution payments out over the course of their entire lifetime (based on life expectancy calculations) and defer paying taxes for as long as possible.  With the passage of SECURE, the payout period has been reduced from their life expectancy to a maximum of 10 years after the owner’s death. The Act dramatically reduces the effectiveness of many carefully constructed estate plans!


In light of this change, Alan Weissberger, Hirtle Callaghan’s Senior Tax and Estate Planning Specialist, recommends undertaking a thorough review of your estate plan and beneficiary designations.


Read further to learn how SECURE might affect you and what steps Alan thinks you should consider taking to plan effectively going forward.