The SECURE Act: Solving the ticking “tax time bomb” paid Impact_Partner
There is an adage, “the government giveth and the government taketh away.” The recently passed SECURE Act is no exception. Legislators recognize that as life expectancies increase and many people stay in the work force longer, forcing investors to begin taking money out of their qualified retirement accounts at age 70 ½ doesn’t take increased life expectancies into consideration.Getty Images
For example, a 20-year-old who inherited all or part of an IRA could have taken out approximately 2% from their account per year with small annual increases and let the remainder grow tax-deferred for 60 years or longer — for a Roth IRA, this would be tax-free. The government’s rationale for this change is that IRAs, 401s, and other qualified plans were designed to help people save for retirement, not to pass wealth on to future generations or defer taxes. The Congressional Research Service estimates that this provision of the act is expected to generateAs a result of the Tax Cuts and Jobs Act of 2017 , today’s federal income tax rates might be the lowest many of us will see for the rest of our lives. The rates shown below apply for 2020.
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