IMPORTANT DISCLOSURE INFORMATION
The following presentation by New England Capital Financial Advisors, LLC (“NECFA”) is intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from NECFA or any other investment professional of your choosing. Please see additional important disclosure at the end of this penetration. A copy of NECFA’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.newenglandcapital.com.
IRA Distributions Update
I know I’ve written and talked about this subject before, but there’s still a lot of bad information and bad advice I hear about IRAs, inherited IRAs, and the required minimum distributions or RMD‘s. Why is this? Well, perhaps one of the reasons is that the rules seem to be constantly changing and are complex. For example, rules on inherited IRA distributions are some of the most complicated in the IRS tax code.
Let me share a timeline with you:
December 2019 – The SECURE Act eliminated stretch IRAs for most non-spousal beneficiaries. Now non spousal beneficiaries must liquidate the account within 10 years, not over their lifetimes. Of course, this depends on when the owner died.
January 2022 – The IRS updated the life expectancy tables for IRAs, inherited IRAs, for required distributions.
February 2022 – The IRS issues regulations to the SECURE Act, requiring distributions for certain beneficiaries, who were subject to the 10-year liquidation rule. Now those certain beneficiaries must also take annual distributions as well as liquidate in the 10 year period. I know I warned you about this one, but a lot of people who were not our clients missed it.
October 2022 – the IRS says if you missed the annual RMD in 2021 that I just talked about they’ll waive the penalty. OK think about that. I was supposed to take the money out in 2021 but the IRS finalize the regulation in 2022??? So, the IRS actually did the right thing by waving the penalty in 2021.
December 2022- The SECURE Act 2.0 was passed with a boatload of changes. A couple of those changes are:
- Delaying the beginning date for RMD’s.
- Reducing the penalty for missed RMD’s, including a three-year statute of limitations for missed RMD penalties. Remember the previous penalty for missing your RMD was 50% of what you should’ve taken out. That’s now down to 10%.
Still confused? Please call us. Remember many of these changes are now a permanent part of the tax code and violating them can’t be undone.
And please keep listening to the New England Capital's video blogs and we’ll keep you informed with good and timely information like this from our team of Chris Lee, Ann Ocone and others on the New England Capital team.
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by New England Capital Financial Advisors, LLC [“NECFA”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from NECFA. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. NECFA is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the NECFA’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.newenglandcapital.com. Please Note: NECFA does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to NECFA’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly. Please Remember: If you are a NECFA client, please contact NECFA, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently. Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.