You may have already heard that the Required Minimum Distribution age went up from 70.5 to 72.
But perhaps a much more significant change is that children will no longer be able to spread out withdrawals from inherited IRAs. Before the SECURE Act, children were able to take small amounts of withdrawals throughout their lifetime in order to minimize their income tax. This is no longer available.
Now, children who inherit IRAs must withdraw the entire balance within 10 years.
Why is this significant?
Let's say parents leave a total of $1M in IRAs. Their child would then need to withdraw about $100k per year. What do you think $100k additional income will do to their income tax bracket? Coupled with the fact that most people are in their highest income earning years when they inherit IRAs.
But there are ways to plan around this change. And I'm here to help.