Provided by Pamela J. Sams, CRPC, NABBW’s Retirement Planning Associate

 If you follow national news, you may have heard of the Setting Every Community Up for Retirement Enhancement (SECURE) Act. Although the SECURE Act has yet to clear the Senate, it saw broad, bipartisan support in the House of Representatives and could make IRAs a more attractive component of your retirement strategy. However, it also changes the withdrawal rules on inherited “stretch IRAs,” which may impact retirement and estate strategies, nationwide. Let’s dive in and take a closer look.¹

Secure Act Consequences.

Currently, those older than 70 ½ must take withdrawals and can no longer contribute to their traditional IRA. This differs from a Roth IRA, which allows contributions at any age, as long as your income is below a certain level: less than $122,000 for single filing households and less than $193,000 for those who are married and jointly file. This can make saving especially difficult for an older worker. However, if the SECURE Act passes the Senate and is signed into law, that cutoff will vanish, allowing workers of any age to continue making contributions to traditional IRAs.²

The age at which you must take your Required Minimum Distributions (RMDs) would also change. Currently, if you have a traditional IRA, you must start taking the RMD when you reach age 70 ½.  Under the new law, you wouldn’t need to start taking the RMD until age 72, increasing the potential to further grow your retirement vehicle.³

As it stands now, non-spouse beneficiaries of IRAs and retirement plans are required to withdraw the funds from its IRA, tax-sheltered status, but can do so by “stretching” the disbursements over time, even over their entire lifetime. The SECURE Act changes this and makes the use of “stretch” IRAs unlikely. Under the new law, if you leave a Traditional IRA or retirement plan to a beneficiary other than your spouse, they can defer withdrawals (and taxes) for up to 10 years max.⁴

What’s next?

Currently, the SECURE Act has reached the Senate, where it failed to pass by unanimous consent. This means it could move into committee for debate or it could end up attached to the next budget bill, as a way to circumvent further delays. Regardless, if the SECURE Act becomes law, it could change retirement goals for many, making this a great time to talk to a financial professional.

Pamela J. Sams may be reached at (703) 547-8682 or pamela@jacksonsams.com. Her website, Jackson Sams Wealth Strategies, is located here: www.jacksonsams.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA/SIPC.  Advisory services offered through Securities America Advisors, Inc., a SEC Registered Investment Advisory Firm, Pamela Sams, Investment Advisor Representative. Jackson Sams Wealth Strategies, Securities America, Inc. and all other entities named are separate entities.

 Citations.

1 – financial-planning.com/articles/house-votes-to-ease-rules-for-rias-correct-trump-tax-law [5/23/19]

2 – irs.gov/retirement-plans/amount-of-roth-ira-contributions-that-you-can-make-for-2019 [6/18/19]

3 – congress.gov/bill/116th-congress/house-bill/1994 [5/16/1900]

4 – law.com/newyorklawjournal/2019/04/05/what-to-know-about-the-2-big-retirement-bills-in-congress/ [4/5/19]

Pamela J. Sams, CRPC® MBA, BFA Financial Adviser

For over 20 years Pamela has been helping women improve their personal and financial wealth through solid financial life planning. Pamela’s education and training enable her to help clients successfully navigate through the myriad of financial decisions they face during their lives. She focuses on helping her clients meet their financial needs and help them work to achieve financial security and greater retirement readiness.

Pamela has become a strong voice in the area of personal finance for women. Her knowledge in this area has made her a sought-after speaker. She has been quoted in articles in various financial publications.

Throughout her financial services career, she has acquired several client service and financial planning awards. She has membership in the Million Dollar Roundtable (MDRT). Membership in MDRT is a highly recognized mark of excellence and limited to only the most successful in the financial services profession. This places Pamela among the top professionals in the global life insurance and financial services industry. Pamela was featured in the Women in Wealth section of Fortune Magazine November 2020 issue as a top Wealth Manager in the Washington DC metro area.

She successfully completed the demanding requirements to receive a Chartered Retirement Planning Counselor certification through the College of Financial Planning. Pamela also holds a Behavioral Financial Advisor designation, awarded to advisors who have undergone training to learn to help clients make financial decisions using a rational, values-based approach. Behavioral Financial Advisor’s integrate techniques founded in traditional finance, psychology and neuroscience to positively influence clients’ spending and saving behavior in the presence of challenging emotions.

Pamela is married, lives in Chantilly, VA and has three children. She devotes her free time to her family, her church, enjoys reading and loves to sing.

Securities offered through Securities America, Inc., a Registered Broker/Dealer, Member FINRA (SIPC). Advisory services offered through Securities America Advisors, Inc., a SEC Registered Investment Advisory Firm, Pamela Sams, Investment Advisor Representative.