In our last two blogs, we have tried to highlight the tremendous opportunity that a thoughtful, proactive distribution plan can provide in retirement. This month, we want to highlight an important consideration that very same distribution plan can have for your heirs.
Pretax retirement accounts are no longer the incredible wealth transfer tool that they were just a few years ago.
SECURE Act (enacted in 2019) and SECURE Act 2.0 (enacted in 2022) eliminated what many financial professionals, CPAs and attorneys referred to as the “Stretch IRA”, where most non-spouse beneficiaries’ required distributions are calculated on their own life expectancy.
Perhaps some of you reading this have a Beneficiary IRA that you inherited before 2020. The required distribution from that account is likely being calculated on your own life expectancy and might be a relatively small piece of your overall financial picture. That will likely be a very different story for your heirs.
Most non-spouse beneficiaries now have just 10 years from the year of the original owner’s death to completely empty all inherited retirement accounts.
In our October 2025 column of The Stroll – “The Retirement Savings Time Bomb” – we pointed out that due to people generally having children later in life than their parent’s generation, many people may now be, or will be, inheriting assets while they are in their peak earning years. Not an ideal time for required, taxable withdrawals.
The strategies that can be implemented to give yourself more control over your own retirement picture have similar impacts for your heirs.
The financial legacy that you leave behind is a cumulative result of the working, saving, investing and spending that occurred throughout your life. We’d love to help you maximize that legacy.
Josh Rebholz, CEPA®, CFP®, Associate Vice President - Financial Advisor
Patrick Tinucci, Senior Vice President - Financial Advisor
Source: irs.gov
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