During his campaign, President Trump vowed to eliminate the taxation at the federal level of all Social Security benefits. According to the Social Security Administration, only about 40% of its beneficiaries pay federal income tax on their benefits. But I'd be willing to wager that the vast majority of you reading this fall into that group.
President Joe Biden signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0 at the end of 2022. SECURE 2.0 also contained numerous sections related to retirement. Among them:
I urge you to embrace bear markets as opportunities, as recurring market phenomena that can't be effectively avoided. This is the bright side of bear markets:
Large tax-advantaged account balances have now been caught up in the political tug of war that is the debate over the Build Back Better Act.
2019's SECURE Act contains two provisions that make converting IRAs and retirement plan accounts to Roths more attractive:
The Setting Every Community Up for Retirement Enhancement Act also contained provisions affecting 529 plans, tax planning, and employee benefits. Let's take a look at some of these other new rules:
Since March, COVID stories have dominated the headlines, and unprecedented financial market volatility has grabbed the attention of investors. As a result, it's been easy to forget that one of the most far-reaching pieces of legislation to affect the financial planning landscape in more than a decade was passed just before the pandemic struck. The SECURE Act, or Setting Every Community Up for Retirement Enhancement Act, contains provisions that impact saving for retirement, estate planning, retirement distribution strategies, tax planning, debt management, and retirement plan administration.
The Coronavirus Aid, Relief and Economic Security Act contains one-time provisions that apply to the taking of required minimum distributions (RMD's) in 2020. The CARES Act also makes temporary modifications to some of the tax rules surrounding this year's charitable giving. With just a couple of months left to take advantage of them, let's explore these changes and their implications.
As mentioned in the most recent issue of "Seasonal Musings" - the quarterly e-newsletter distributed by Five Seasons Financial Planning - the passing of the SECURE Act late last year permanently changed the financial planning landscape, and in particular, many of the rules on required distributions from IRA's and retirement plan accounts. The Coronavirus Aid, Relief and Economic Security (CARES) Act, passed just a few months later, contains a number of measures related to the taking of RMD's in this calendar year alone.
After having played political ping-pong with them for almost a decade, Congress finally made qualified charitable distributions (QCD's) a permanent feature of the tax code late in 2015. And that's a good thing: (a) for those who consider their IRA required minimum distributions to be an unneeded and tax-inefficient nuisance, (b) for charitably-minded retirees, and (c) for charities in general.