• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to secondary navigation
  • Skip to primary sidebar
  • Skip to footer

Before Header

Call us today for help!  (631) 265-0599
  • Facebook
  • LinkedIn
  • Twitter

Eghrari-Logo

Long Island Elder Law & Estate Planning

  • Home
  • Who We Are
    • About Our Firm
    • Meet Our Team
  • Resources
    • Client Resources
      • Definitions
      • Docubank
      • Elder Law Resources
        • Brentwood Elder Law
        • Central Islip Elder Law
        • Commack Elder Law
        • Hauppage Elder Law
        • Smithtown Elder Law
      • Estate Planning Resources
        • Estate Planning Check Up
        • Estate and Gift Tax Figures
        • Estate Planning Techniques
        • Estate Planning Worksheet
        • FREE Estate Planning Seminars
        • Long Island Estate Planning Resources
      • New York Medicaid Resources
        • Medicaid Planning Worksheet
      • Nursing Home Resources
      • Probate Resources
        • Brentwood Probate
        • Central Islip Probate
        • Commack Probate
        • Hauppage Probate
        • Smithtown Probate
        • Suffolk County Probate Resources & Checklist
      • Presentations
      • Retirement Planning Checklist
      • Trust Administration Resources
    • Elder Law Reports
    • Frequently Asked Questions
      • Business Planning
      • Estate Planning
      • Families Without an Estate Plan
      • Incapacity Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Reports
  • Estate Planning
    • Asset Protection & Business Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses
    • Incapacity Planning
    • Legacy Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Hospice Care
    • Medicaid Planning
  • Areas We Serve
    • Long Island
    • Nassau County
      • Oyster Bay
    • Suffolk County
      • Brentwood
      • Central Islip
      • Commack
      • Hauppauge
      • Smithtown
  • Blog
  • Contact Us

Mobile Menu

  • Home
  • Who We Are
    • About Our Firm
    • Meet Our Team
  • Resources
    • Client Resources
      • Definitions
      • Docubank
      • Elder Law Resources
        • Brentwood Elder Law
        • Central Islip Elder Law
        • Commack Elder Law
        • Hauppage Elder Law
        • Smithtown Elder Law
      • Estate Planning Resources
        • Estate Planning Check Up
        • Estate and Gift Tax Figures
        • Estate Planning Techniques
        • Estate Planning Worksheet
        • FREE Estate Planning Seminars
        • Long Island Estate Planning Resources
      • New York Medicaid Resources
        • Medicaid Planning Worksheet
      • Nursing Home Resources
      • Probate Resources
        • Brentwood Probate
        • Central Islip Probate
        • Commack Probate
        • Hauppage Probate
        • Smithtown Probate
        • Suffolk County Probate Resources & Checklist
      • Presentations
      • Retirement Planning Checklist
      • Trust Administration Resources
    • Elder Law Reports
    • Frequently Asked Questions
      • Business Planning
      • Estate Planning
      • Families Without an Estate Plan
      • Incapacity Planning
      • LGBTQ Estate Planning
      • Medicaid Planning
      • Probate
      • Trust Administration
      • Trust Administration & Probate
      • Wills and Trusts
    • Reports
  • Estate Planning
    • Asset Protection & Business Planning
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses
    • Incapacity Planning
    • Legacy Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Emergency Medicaid & Nursing Home Planning
    • Hospice Care
    • Medicaid Planning
  • Areas We Serve
    • Long Island
    • Nassau County
      • Oyster Bay
    • Suffolk County
      • Brentwood
      • Central Islip
      • Commack
      • Hauppauge
      • Smithtown
  • Blog
  • Contact Us

More IRA Changes Are on the Way

SECURE ActThe individual retirement account guidelines changed recently after the SECURE Act was enacted in December of 2019. There are follow-up pieces of legislation in the House and Senate that will make further changes, and we will look at them here.

Original SECURE Act

We will start with a review of the changes that have already been implemented via the first piece of legislation.

Traditional individual retirement account holders contribute into their accounts before they pay taxes on the income, so they get a break in the near term. However, distributions are looked upon as taxable income by the IRS.

Roth accounts are funded after the taxes have already been paid, so distributions are not taxed. If you have a Roth account, you are never required take any money out of the account, regardless of your age.

Since taxes have never been paid by traditional account holders, the IRS wants to start getting their share eventually, so required minimum distributions (RMDs) have been mandated. The age at which the distributions had to be taken was 70.5 before the SECURE Act came along.

A provision contained within the measure increased this age to 72, and account holders were given the ability to contribute into their accounts after they reach this age. Previously, they had to stop making contributions after they reached the RMD age.

Elimination of the Stretch IRA

Non-spouse beneficiaries of traditional and Roth IRAs are required to take distributions on an annual basis. A beneficiary could take only the minimum that was required for the maximum length of time to take full advantage of the tax benefits.

This was called the “stretch IRA” strategy, and it was very effective from an estate planning perspective. It was particularly useful for Roth account beneficiaries because the distributions are not taxable.

A provision in the SECURE Act closed this window of opportunity because it requires account holders to clear out their accounts within 10 years of the time of acquisition.

SECURE Act 2.0 and the Retirement Security & Savings Act

The Securing a Strong Retirement Act or SECURE Act 2.0 is progressing through the United States House of Representatives, and the Retirement Security & Savings Act is a similar bill that is in the Senate.

These measures would make further changes to the individual retirement account parameters. One of them is an additional increase in the required minimum distribution age for traditional account holders. It will go up to 75 if and when these measures are enacted.

We should point out the fact that it is very likely that these changes will be implemented because the bills have strong bipartisan support, they were introduced on a bipartisan basis.

Employees will be automatically enrolled into their workplace 401(k)s, and they would be given the opportunity to opt out. The 401(k) catch-up contribution for older workers would go up to $10,000; it is currently $6500.

A lot of employees that are saddled with student loan debt do not have enough income to contribute into retirement savings accounts. To address this issue, under SECURE Act 2.0, employees would be able to provide 401(k) matches for employees that make qualified student loan payments.

There is a savers credit for people that contribute into retirement savings accounts that are in low to moderate income brackets. It is $1000 at the present time, and it would go up to $1500. Plus, the parameters would be changed to allow more people to become eligible for the credit.

We Are Here to Help!

If you are ready to work with a Smithtown, New York estate planning lawyer to put a plan in place, our doors are open.

There are many different approaches that can be taken when you are planning your estate. The ideal course of action will depend on the circumstances, so personalized attention is key. This is what you will receive when you work with our firm.

You can send us a message to set up a consultation appointment, and we can be reached by phone at 631-265-0599.

  • Author
  • Recent Posts
Eghrari Wealth Training Law Firm
Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill.
Latest posts by Eghrari Wealth Training Law Firm (see all)
  • Trust Creation Steps for the Beginner - May 18, 2022
  • The Equal Gifting Dilemma - May 4, 2022
  • Can I Prevent a Challenge to My Will? - April 27, 2022

About Eghrari Wealth Training Law Firm

Mark S. Eghrari is an attorney in private practice in Smithtown, New York. He has been in practice since 1988. Mark S. Eghrari provides extensive estate and tax planning services to individuals and businesses. Mr. Eghrari’s primary focus is helping clients avoid probate, minimize or eliminate Federal and State Estate taxes and protect their assets from the high cost of nursing care, if they become ill.

Previous Post: «estate tax Is There a New York Gift Tax?
Next Post: Does Your Estate Plan Include a Letter of Last Instruction? letter of last instruction»

Primary Sidebar

Blog subscription

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • LinkedIn
  • Twitter

Where We Are

Eghrari Wealth Training Law Firm
50 Karl Avenue, Suite 202
Smithtown, NY 11787
Phone: (631) 265-0599
Fax: (631) 265-0754

See Larger Map
Get Directions

Office Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 2:00 PM

Map

map for Eghrari Wealth Training Law Firm office

Footer

Office Location

Eghrari Wealth Training Law Firm
50 Karl Avenue, Suite 202
Smithtown, NY 11787
Phone: (631) 265-0599
Fax: (631) 265-0754

See Larger Map
Get Directions

Office Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 2:00 PM

Sign Up for Our Newsletter

Sign up to get our free estate planning newsletter for all of our tips and resources

  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Site Footer

ATTORNEY ADVERTISEMENT

Copyright © 2022 American Academy of Estate Planning Attorneys · All Rights Reserved