Episode 021:
How Does the SECURE Act Affect Your IRAs?


Episode 021 Summary:

Wait for it! Who knew that anticipating one person’s “Byeee!” could create such compelling podcast drama? We don’t want to undersell the exciting insights Host Josh Bretl is sharing about the Secure Act of 2019 on this episode of The Retirement Equals Freedom Podcast. But its special guest Erin Fogarty, an advisor at FSR Wealth, who generates the emotional high points! (You just have to listen really, really closely …)

In the meantime, if you’re stashing earned income in an IRA-type retirement account, you’ll want to know all about the implications of a new and evolving law whose reassuring acronym – SECURE – stands for “Setting Every Community Up for Retirement Enhancement Act.”

Without proactive financial planning, you may miss the boat on timing distributions and wind up paying taxes you want to avoid! You’ll learn about how The Secure Act of 2019 came to be (and why there’s already a 2.0 version under consideration) as well as some of specific changes that may impact how non-spouses who inherit retirement accounts will need to sequence distributions.

Co-host Dave Schmidt brings it all together with a vivid illustration of what could happen to retirees or soon-to-be-retirees who don’t get help decoding all the fine print! (Please note: No bunnies were harmed in the making of this podcast.)

You won’t want to miss this opportunity to jot down notes and questions for your retirement planner about this policy that’s still a work in progress!

This episode was fueled by Cometeer Coffee, both iced and hot!

Numbers are growing like crazy, so get onboard by signing up for the show’s new weekly email using the form below, and then come on over and join the conversation at our new private Facebook group, which you can find here (#MoreErin!).

Click here to explore the services that FSR Wealth Strategies offers and schedule a discovery call with one of the team’s CPAs. When it comes to living your best life, it’s never too early to get started!

The Rabbit of Caerbannog

The Rabbit of Caerbannog vs. The SECURE Act of 2019

Talking Points

Dad Driving isn’t a college major. But maybe it should be?

Get to Know Josh and Dave: Was there something you asked for repeatedly as a child and the answer was always “No”?

  • Dave: Yes, multiple things! No. 1 request denied? A water balloon slingshot!
  • Josh: Sleepovers: Whether hosting or attending, his parents thought they were the worst!

Now on with the show!

Explaining the Secure Act of 2019, which stands for “Setting Every Community Up for Retirement Enhancement Act,” and became law on December 20, 2019.

Designed to help retirees, the average taxpayer will end up with higher taxes if they fail to put in place a proactive strategy!

Good News/Bad News. The Secure Act’s Most Notable Changes include:

  • The Required Minimum Distribution age was raised from the age of 70.5 to 72 years old, which affords a couple of extra years to delay paying taxes on IRAs.
  • The Stretch Provision that allowed non-spouses inheriting IRAs and Roth IRAs to take smaller distributions over a long period of time has now been limited to no more than 10 years after the account owner’s death.

If you haven’t talked to your estate attorney since the Secure Act went into effect, now’s the time to do so! There are changes, including to Conduit Rules, that can substantially impact trust outcomes and the timing of distributions. Tax implications are real!

#TaxNerd: If you missed it, now might be a good time to go back and listen to previous podcasts: Ep. 11: Roth IRAs May Be The Greatest Tax Benefit to Retirees and Ep. 12: Roth IRA Conversions Are for Everyone!

Other Important Developments:

  • Go ahead and keep on working! So long as you have earned income, there’s no longer an age limit for making contributions to an IRA.
  • Keep an eye out for Secure Act 2.0, which just 2.5 years after the original is going to include modifications that may impact how much you can spend in retirement, when and how!

Cue the Jingle! Yeah! (Erin’s voice oozes with excitement!) Amendments to his official meal subsidy may reap benefits for Dave – or maybe not?! Josh reminds us to look at the fine print that often hides policy downsides.

Bottom Line: The Secure Act offers some great advantages, but not without the right planning for tax efficiencies. Without a solid strategy, the rabid bunny might attack. (You have to tune in to get the context! With apologies to fans of Monty Python.)

Quotable Quotes

“Hello everyone.” ~Erin

“For the average person, The Secure Act will actually cost them more in taxes if they don’t do anything proactively about it.” ~Josh

“I like to say ‘When the government giveth, it always also takes away somewhere else.’ ” ~Josh

“While the government did a nice thing not collecting taxes a year and a half early, they’re going to collect a lot more taxes on the back end for people who haven’t planned for it.” ~Josh

“The Secure Act got a lot of positive press. The government marketed it really well … and because of that they’re already looking at Secure Act 2.0.” ~Josh

“There are certain things that will impact how much you can spend in retirement and for those people who have a majority of assets inside of IRAs and 401ks – which is most of America – you need to know these rules and how they impact you.” ~Josh

“With The Secure Act there are some good things IF it’s taken advantage of and planned for appropriately … But there’s also things that, if you’re not aware, could harm you. You want to be sure you’re taking the whole picture into consideration as you do your planning.” ~Josh

“The Secure Act is like the rabid bunny for Monty Python and the Holy Grail!" ~Dave

“The Secure Act is not designed to attack and kill you. You just have to know how to work with it.” ~Josh

“Byeee!” ~Erin

Episode Extras

About your Co-Hosts

A certified public accountant, Josh Bretl has spent the past two decades growing FSR Wealth Strategies into a firm that specializes in tax-focused retirement planning. Because taxes have the single biggest impact on how much you can spend in retirement, Josh is dedicated to developing individualized financial plans that extend and grow his clients’ retirement savings. Based in Elmhurst, Illinois, FSR Wealth strategically preserves and maximizes resources through tax-efficient strategies designed to fulfill retirement dreams.

Apart from producing and co-hosting The Retirement = Freedom Podcast, Josh's longtime friend Dave Schmidt is a content production and marketing adviser to local businesses and nonprofits. He’s also an advocate for t-shirts, all things 90s (especially the music), short walks and long naps. A serial “wallet forgetter,” Dave nonetheless swears that he has picked up the check on at least one or two meals with Josh over the years. Evidence pending.

Standard Disclaimer:
FSR Wealth Management is a registered investment advisor located in Elmhurst, Illinois. Information and opinions contained in this audio have been arrived at by FSR Wealth advisors. All information herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, a solicitation or recommendation to purchase any security. FSR is not providing legal, tax, accounting, or financial planning advice in this audio. These views are as of the date of this publication and are subject to change.

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