Questions and Answers from the SECURE Act Webinar

Welcome back to another episode of Retirement Starts Today. On this episode, I review the questions that were asked in both sessions of the SECURE Act webinar. You’ll want to listen even if you attended a webinar session since you didn’t hear the questions that were asked in the other session. I really enjoyed teaching you all about the SECURE act in the webinar and I plan to have another webinar sometime around April. Listen in to hear all of your SECURE Act questions answered.

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Outline of This Episode

  • [3:02] If I have an inherited IRA will my heirs be subject to the 10-year withdrawal rule?
  • [3:55] What estate planning tools can I explore since 80% of my estate is in IRA
  • [5:30] Can a spouse disclaim an amount to children
  • [6:34] Any planning tools available to calculate Roth conversions?
  • [10:29] Do RMD distributions apply to ERISA accounts?
  • [11:20] Do you take your first RMD in the year you turn 72?
  • [12:08] Can an IRA be passed on to minor grandchildren?
  • [13:03] If you are already stretching you can continue to stretch
  • [13:24] Does the 10-year window start over if I die?
  • [13:47] Are qualified charitable distributions affected by the SECURE Act?
  • [14:24] Is the Roth IRA subject to the stretch limit as well?
  • [15:13] Does a trust have a 10-year timeline as well?
  • [16:22] Where do people keep their inherited IRA?
  • [17:44] Can you make a QCD greater than your RMD?

If I have an inherited IRA will my heirs be subject to the 10 year withdrawal rule after I pass?

Yes. Even if you were grandfathered in and stretching your inherited IRA, once you pass your beneficiaries must follow the new rules. They will need to withdraw the full amount of the IRA in 10 years. 

Are there estate planning tools that can help plan long-term?

There aren’t any specific estate planning tools that I use, but systematic Roth IRA conversions are a great tool to ease the tax burden. You should review your estate plan with a professional every few years since the rules are constantly changing. 

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Can a spouse beneficiary disclaim an amount to the children rather than splitting in advance?

Yes, this is possible but it’s best to consult an attorney. The best thing you can do is plan out your IRA beneficiaries well in advance. 

Do RMD distributions apply to ERISA accounts (such as 401K and 403B)? 

Yes, since you delayed paying taxes on it, you’ll need to follow the same rules as with IRA’s. The taxes are due once you turn 72.

Do you need to take your first RMD the year you turn 72 or in the following year?

You have a choice, you can do it during the year you turn 72 or before April 1 the following year. But please remember if you wait until the following year, you will owe two distributions that year. 

Can an IRA be passed on to minor grandkids?

Yes. They will still need to take the age-based RMD’s while they are minors and then their 10-year window will open once they become of age. 

You can invest your inherited IRA similarly to your other investible assets. Click To Tweet

Are qualified charitable distributions affected by the age change?

No, oddly enough, they are not. The age remains 70.5 for QCD’s

Does a trust have a 10-year timeline as well?

Yes, everything must come out of the IRA in 10 years. Check out episode 124 to hear more about trusts and the SECURE Act. 

Where do people keep the proceeds of their inherited IRA?

You can keep your inherited IRA wherever you’d like as long as you don’t combine it with your own IRA. You can invest your inherited IRA similarly to your other investible assets. 

Are qualified charitable distributions (QCD) limited to the amount of your required minimum distribution (RMD)?

It is important to remember that QCD’s are capped at $100,000 per year. So as long as your RMD is under $100,000 then your QCD will satisfy your RMD.

Make sure to listen in to hear all of the questions and the complete answers!

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