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In a 417 to 3 vote, the “Setting Every Community Up for Retirement Enhancement” or SECURE Act has passed the House, and is heading to the Senate for vote. Here is a brief rundown of the bill’s major provisions along with some thoughts.
In summary, this legislation really just provides insurance companies better access to the $5 trillion dollar 401k market, at the expense of the Inherited IRA.
If this legislation passes, here are a couple of items for consideration:
If you are currently saving in a retirement plan and do not need the tax breaks of Pre-tax contributions, Roth contributions going forward could make sense. I would also review the fees inside of your 401k if your company moves to an annuity platform.
If you are retired, I would discuss Roth conversions with your accountant to see if it makes sense to gradually move money from Pre-tax to Roth over the course of several years.
Permanent life insurance to cover future tax liabilities will once again be a planning item. This type of life insurance was minimalized when the estate tax cap was increased to over $11M. Now it will come back into play, except this time for middle class America.
I hope this is helpful, as always if you have any questions please don’t hesitate to contact me at the office. Have a great holiday weekend!