Tactics for Stretching Retirement Assets under the SECURE Act

The Setting Every Community Up for Retirement Enhancement (SECURE) Act, signed into law by President Trump on December 20, 2019, as part of funding legislation for the federal government, has many provisions relating to financial planning, especially retirement planning with IRAs and employer-sponsored plans. Among the provisions attracting the most attention is the curtailing of “stretched” inherited retirement assets.

In a typical stretch arrangement, one spouse would retire with a retirement account, which would be tapped during their lifetime and the balance left to a surviving spouse. The surviving spouse would continue to draw down the account and eventually leave the remaining funds to their children (or other beneficiaries, such as grandchildren). These ultimate heirs might be able to spread required minimum distributions (RMD) over their life expectancies, possibly resulting in decades of untaxed compounding and substantial wealth accumulation.

Read More: Sidney Kess, JD, LLM, CPA and Julie Welch, CPA, PFS, CFP, Tactics for Stretching Retirement Assets under the SECURE Act, CPA Journal, April 2020

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