More Articles  Printer Friendly Version

 
Featured News    Financial Briefs    Market Data Bank    Articles Of Interest    

Financial And Tax Planning For The Long Run

(Tuesday, June 30, 10 p.m. EST) After paying a terrible price in lost lives, suffering, and grief, the Covid economic crisis will pass, along with emergency tax relief in the history-making $2.2 trillion CARES Act of 2020. The tax law with us permanently, and the rules that will be affecting you every year for years to come, is the SECURE Act.

Signed by President Donald J. Trump on December 20, 2019 the Setting Every Community Up for Retirement Enhancement Act of 2019 (SECURE) Act mandates non-spouse beneficiaries of IRAs deplete their accounts within 10 years of inheriting a federally qualified retirement account. A non-spouse beneficiary may be your child, grandchild, nephew or niece, or other family members you want to support after you're gone.

New Retirement Income Planning Choices. SECURE Act encourages using more lifetime income annuities to secure retirement. While this may be good generally, there is one huge caveat: annuities can be expensive. Lifetime income backed by an insurance company's creditworthiness makes for a great sales pitch but are best advised on by a professional who places your best interest above all else, including the sales commissions they will earn.

Business Owner Tax Breaks. SECURE Act also makes it less expensive and easier for business owners to establish and administer "safe harbor" retirement plans, including , boosting the "gig economy," and making part-time workers eligible for employer retirement plans. 

Delaying Distributions Until Age 72. Postponing required minimum distributions (RMDs) 18 months is another idea you may want to consider. The SECURE Act lets you delay RMDs on IRAs, effectively extending the benefit of compounding. Instead of requiring you to begin depleting your retirement account at age 70½, you can now delay it until age 72. This small change can amount to big bucks because your IRA can compound without being taxed for an extra 18 months. Deferring taxes for 18 months on a large IRA is a no-brainer, if you can afford it. Implementing this step in your retirement income plan should be part of your overall strategy to outlive your money and create a legacy for your family.

The SECURE Act and other tax reforms passed before the CARES Act make tax and financial planning more important to individuals who are about to retire or who recently retired. Weighing SECURE Act's sweeping tax implications as well as Covid- 19 emergency tax relief provisions in CARES Act making Roth IRA conversions more attractive requires detailed knowledge of your personal situation. Please contact us with your questions.


Email this article to a friend


Index
Starting A Business? Plan To Succeed
Stock Market Rally Broadened In Past Three Months
3Q 2020 Wealth Management Report
Income, Estate And Gift Tax Hikes Ride On Election Results
2020 Year End Tax Planning For Retirees, Business Owners, And Families
Set Your Financial Priorities Right Now
Poor Bond Outlook May Herald A New Stock Valuation Regime
Family Wealth Transfer Opportunities Spawned By Covid
A Five-Point Covid Diagnostic For Family Wealth Management
Private Wealth's Perfect Storm
Confronting Mortality's Details
Anomalous Financial Economic Conditions Of The Covid Crisis
Three Easy Ways To Increase Your Chance Of Financial Success
Act Before The Tax Pendulum Swings Back
Act By The End Of 2020 For A Major Retirement Income Tax Break
Business Owner Alert: Main Street Lending Program Offers Covid Aid

This article was written by a professional financial journalist for Beacon Financial Advisors, Ltd. and is not intended as legal or investment advice.

©2020 Advisor Products Inc. All Rights Reserved.
© 2020 Beacon Financial Advisors, Ltd. | 1800 St. James Place, Suite 101, Houston, TX 77056 | All rights reserved
P: 713-622-9981 | F: 713-622-5814 | josh@bfaltd.com |
Disclosure | Privacy Policy | Contact Us | Home