Death of the Stretch IRA & the MEGA Backdoor Roth


Manage episode 293050398 series 2907060
על ידי Daniel W. Leonard and Dan Leonard התגלה על ידי Player FM והקהילה שלנו - זכויות היוצרים שמורות למפרסם, לא ל-Player FM, והשמע מוזרם ישירות מהשרתים שלכם. הירשמו כדי לעקוב אחר עדכונים ב-Player FM, או הדביקו את כתובת העדכונים באפליקציות פודקאסט אחרות.

In Episode 4, I review a few articles about clarifications to the SECURE Acts new 10-year Rule for Non-Designated Beneficiaries and a new bill talking about the SECURE Act 2.0. After that, we’ll address how to use the Spillover Election to help you do a MEGA Backdoor Roth Contribution, while still getting a tax-deferral on your Elective Deferral.

The new 10-year rule ended the ability for many people to do a Stretch IRA, meaning instead of being able to deferral the taxes, on inherited retirement assets, over your lifetime you now only have 10-years. It isn’t a big deal if you planned to spend all the money, but for savers who would take minimum distributions over their lifetime. The change is forcing them to pay taxes sooner rather than later.

The SECURE Act 2.0 has been proposed and passed through the House Weighs and Means Committee unanimously. It is a far way from being a law, but the provision raising the age to start Required Minimum Distributions from Retirement Accounts to 75, is likely to be popular.

Finally, Backdoor Roth IRA Contributions are great if you can do them. There is a catch you need to make sure you understand so you don’t get a surprise at tax time. If you are subject to that catch or just want to save more and not have to jump through a lot of hoops, the MEGA Backdoor Roth contributions through your 401(k), can make your life easier.

As a PG&E Retirement Specialist, I help people maximize their contributions to their 401(k) both before tax and after-tax. Whether you are just starting out at PG&E or you are ready to retire understanding the in’s and out’s of the PG&E 401(k) can give you a leg up on saving for retirement.

For more information, visit the show notes at

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