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The Secure Act and How It Will Impact Your IRAs

Your IRA benefits are possibly soon to change because of The Secure Act. If you are planning for retirement, the chances are you have invested in an individual retirement account (IRA). Tax-free and tax-deferred IRAs have been offered since 1974 to help Americans increase their assets without incurring penalties. Not only that, these IRAs are transferrable to particular surviving beneficiaries you choose. Today, you and your families enjoy tax-deferred benefits in traditional IRAs. The fact is, The Secure Act vote, also called “Setting Every Community Up for Retirement Enhancement Act” (which already passed in the House 417 to 3) is going to change this to a degree.

The Secure Act Impact

While there are some benefits to The Secure Act, the downside is that the act includes language that would eliminate “stretch IRAs” – those that give you flexibility in extending tax-deferred benefits, particularly to surviving non-spouse beneficiaries. If an IRA-holding individual passes away today, a child could be cared for with this benefit. Once Congress passes this legislation, your stretch IRA will not be eligible to transfer as a tax-free account. Overall, IRA holders could see a reduction in their retirement plans, particularly IRAs, Roth IRAs, and 401(k) plans. As well, a beneficiary would have only ten years to withdraw the IRA funds, and they will be subject to increased taxes. Consider that nearly one-third of inherited IRA funds will go to taxes.

Also included in The Secure Act is a new age requirement for minimum IRA distributions, from 70-1/2 to 72. This could change the eligibility of a surviving spouse but also include a higher tax burden due to a single taxpayer status. The current government tax cuts, in place through 2025, once expired and coupled with The Secure Act legislation could result in retirees and their beneficiaries experiencing a significant deficit. Consider how these actions might also impact your son or daughter’s college plans or your son’s trust fund in a highly taxed outcome. As well, the 529 college savings plans for homeschooling would be significantly impacted.

Why The Secure Act?

 While the current retirement savings plan system in the American workplace has been effective over the years for retirement financing and investments that fuel our nation’s economies, it is not perfect for all citizens. The Secure Act is in place to address some of the current retirement system shortcomings: nearly half of the American workers do not have retirement plans, and the system has outdated savings limitations, timelines, and strategies for converting lifetime savings. Naturally, The Secure Act supports the government in that politicians can make more in tax revenues and yet not raise taxes.

Respond to The Secure Act Now

The Secure Act, or Setting Every Community Up For Retirement Enhancement Act of 2019, features a variety of positive, government-enforced benefits, but the negative impact on certain IRA holders is concerning. The bottom line is that 1) this act would minimize the tax-deferred advantages for some IRA beneficiaries, and 2) this act would require that non-spouse beneficiaries claim inheritances within 10 years. Instead of gradually taking funds under the required minimum distribution (RMD) plan, this demand accelerates the distribution—impacting tax advantages. The Secure Act would primarily impact heirs and inheritance accounts.

This is a case when a gold-backed IRA or silver IRA is an absolute win. You can respond to The Secure Act now, before it is signed into law. It is merely a time when gold and silver held in storage are sound, tangible, and yours to do with as you wish. If you are ready to take matters into your own hands, reach out to Reagan Gold Group for an honest, up-front investment in a gold or silver IRA. Gold investing or silver investing is an excellent response in a time of uncertainty for our political landscape — what better time than the present to firm up your retirement portfolio with a gold IRA.

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