facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog external search brokercheck brokercheck Play Pause

Providing for the Surviving Spouse After the Secure ACT


Have you heard of the SECURE Act? It was passed into law back in December 2019. It largely got overshadowed by the ensuing pandemic and the larger more popular Cares Act. Most notably, the SECURE Act changed the "life expectancy payout method" from retirement accounts to a less favorable "10 year rule." This means certain beneficiaries of retirement accounts must withdraw money within 10 years of inheriting. Fortunately, the surviving spouse, as an "eligible designated beneficiary," is usually exempted from this change.

However, there are some exceptions worth noting. Natalie Choate, an estate planning attorney in Boston, covers these exceptions in her recent article for Morningstar: Providing for the Surviving Spouse After SECURE. I encourage you to read Natalie's article as I found it a helpful summary. 

If you are the beneficiary of a spouse's retirement plan, there are several choices to make. Should you or can you roll the retirement plan into an IRA? What are the pros and cons? What if the IRA you inherited had after-tax or Roth contributions, what are your options for those monies? How are required minimum distributions calculated? How should you invest the money in the IRA? 

As you can see, retirement planning is more complicated than it used to be. Years ago, retirees relied on Social Security and pensions. That has changed significantly. Now retirement planning is more or less up to us. Not to mention the rules are more complicated than they used to be. The way I see it, proper financial planning is more important now than ever.  The stakes are too high, and bad choices are often hard or impossible to correct. Luckily you don't have to go this alone. If you find yourself unsure or need a second opinion on your financial situation, please feel free reach out to me below. There is no charge for the initial consultation.