Welcome to the June issue of Birds of a Feather - the Red Feather Financial e-newsletter. This issue we celebrate Power in Partnership. While Red Feather Financial is fiercely independent, we do not work alone. First, we are partners with the Estate and Asset Preservation Law Firm founded by RFF's co-owner, Victoria Collier. Second, we are partners with Synergy Independent Financial Solutions a comprehensive financial planning firm that provides us with 30+ years of industry knowledge and experience. Separate though we may be, we are all birds of a feather - united by our passion to serve and protect your best interests. If you would like to learn more about these partnerships, come to one of 4 seminars scheduled for this month. Read on for details. - Dr. Sabrina A. Scott
Welcome to Morgan Marx
Morgan Marx is one of the partners at Synergy Independent Financial Solutions, and Red Feather Financial's newest ally. Morgan is a CFP® CERTIFIED FINANCIAL PLANNER TM Practitioner that assists seniors and their families on all aspects of the elder care journey. Her expertise in asset protection, retirement, long-term care and wealth transfer strategies has proven to be an invaluable benefit to the Red Feather Financial client experience.
She believes, as we do, that it is incredibly important that all Seniors, and their families, are educated and informed of all of the long-term care options available to them in order to make a purposeful decision on how to prevent losing a lifetime of savings during an impairment event.
Morgan is a native of Kansas but today is based in Houston, Texas where she lives with her husband, her son, and her dog. She regularly comes to Atlanta to meet with clients at our Decatur office.
Is Your Retirement SECURE?
One of the things Victoria and I do to prepare for new clients and continue to serve current clients is to keep abreast of changes in the law that may impact planning for retirement and long-term care. One of those potential changes is the Setting Every Community Up for Retirement Enhancement Act of 2019 also known as the SECURE Act. On May 23, 2019, the U.S. House of Representatives passed the SECURE Act by a vote of 417 to 3 and it’s anticipated that the Senate will also pass the act. The proposed effective date is December 31, 2019.
If passed, it will be the biggest change to the U.S. retirement system since 2006 and the Pension Protection Act. Why was the act proposed? Because of the great retirement gap – the gap between the amount of savings required for retirement and the amount of actual savings made by Americans. The significance of the SECURE Act is that it will impact all employer-provided retirement plans, individual retirement accounts (IRAs), and other tax-favored savings accounts and chances are you have at least one of those types of accounts.
There are several aims of the act including:
- to allow expenditures from retirement plans for childcare and other qualified expenses within a year of birth or adoption without the penalty
- to allow certain penalty-free withdrawals to pay off student loans
- to help small businesses set up retirement plans
It will also help the person saving for retirement by allowing he/she to defer required minimum distributions (RMDs) until age 72 rather than 70 ½ and continue making contributions after age 70 ½ letting your savings grow that much more.
All of these helpful measures will of course cost money and where will this come from? Maybe from the increased taxes on distributions from inherited IRAs because the SECURE act will set limitations for IRAs inherited by non-spouse beneficiaries. Specifically, such beneficiaries will be required to withdraw the entire amount from such IRAs within 10-years of the original IRA owner’s death and thus pay the resulting taxes. While it can be very gratifying to see a retirement account’s value grow, there is the pain that occurs when withdrawing from a tax-deferred account because then taxes must be paid.
Now the recommended strategy for most inherited IRAs is to maximize growth by prolonging or stretching out IRA payments for as long as possible and under current law that can be as long as the life expectancy of the beneficiary. But imagine if you inherit a fairly large IRA from your mother or father and you are then required to distribute the entire amount and pay the taxes on it within 10 years of their death?
Given the potential impact of the SECURE act and the great likelihood of its becoming law due to bipartisan support, Red Feather Financial needs to be prepared for what the final version will mean for those of you with retirement accounts after the end of 2019. A change in financial and/or estate planning may be recommended for those of you who anticipate inheriting a large retirement account or have a large retirement account that they plan to pass on to someone other than their spouse. First, of course, the act must be made law, so stay tuned.
Meet Morgan Marx at this free seminar.
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