THE SECURE ACT: HOW IT AFFECTS YOU AND THE BENEFICIARIES OF YOUR RETIREMENT ACCOUNTS.

The SECURE Act, effective January 1, 2020, is the most impactful legislation affecting retirement accounts in decades.

There are several positive changes. It increases the required beginning date (RBD) for required minimum distributions (RMDs) from your retirement accounts from 70½ to 72 years of age, and it eliminates the age restriction for contributions to qualified retirement accounts.

However, perhaps the most significant change will affect the beneficiaries of your retirement accounts. The act requires most beneficiaries to withdraw the entire balance of an inherited retirement account within 10 years of the account owner's death. This may result in the acceleration of income tax due, causing your beneficiaries to be bumped into a higher tax bracket, thus receiving less of the funds than you may have originally anticipated. "Stretch distributions," distributions based on the life expectancy of the designated beneficiary, are now very limited.

There are several strategies that can help you properly plan for your family and protect your hard-earned retirement accounts, including but not limited to:

Converting to a Roth account
Updating your revocable living trusts
Creating standalone retirement trusts, charitable remainder trusts, irrevocable life insurance trusts or multi-generational spray trusts

Working together with your estate planning attorney, financial advisors and CPAs may help you explore new planning opportunities supported under the act to protect your hard-earned assets.