In a previous post, we explored the SECURE Act and how it affects inherited retirement accounts. Before the SECURE Act, retirement beneficiaries could spread out taxable distributions from the account over their lifetime. In fact, the government, at a minimum, required these distributions to the beneficiaries annually. However, beneficiaries sometimes elected distribution amounts greater than that required and paid tax on the additional distribution. This created scenarios where less prudent, less responsible beneficiaries withdrew inherited retirement all at once. They would then proceed to squander the proceeds leaving less security for their own retirement. If retirement account holders wanted assurances [...]

In a previous post, I examined how the SECURE Act potentially creates greater taxes for retirement beneficiaries. Acknowledging this, is there any strategy that minimizes the tax your family ultimately pays on pre-tax retirement accounts? While we cannot eliminate the somewhat negative side effects of the SECURE Act, we can take steps reduce it's impact. Generally, committing to pay more tax now on your retirement will likely minimize the overall tax to your family. Let's explore how and why this is the case. For starters, under the new tax laws passed in early 2018, personal income tax rates are at [...]

With Congress passing the SECURE Act, my Louisiana Estate Planning clients worry how this affects their family's retirement. Specifically they worry how it will impact their taxes. In short, the SECURE Act creates a climate where individuals who inherit pre-tax retirement accounts will pay more taxes. This is because most individuals inheriting retirement accounts must withdraw and pay tax on all of the inherited retirement within ten years of the IRA owner's death. Previously, non-spouse retirement account inheritors could spread out the taxable distributions over their life expectancy. For example, if you inherited a $1,000,000 IRA last year at age [...]