The SECURE Act: 3 Key Provisions Impacting Financial Professionals

A few months ago, we published a blog about pending legislation called the SECURE Act of 2019 which had several provisions impacting retirement planning.  Now that the Act has officially passed, we thought it would be beneficial to revisit a few key provisions affecting the agents and advisors with whom we work.  While the Act was wide-ranging in its impact, there are key 3 points to consider:

  1. Required Minimum Distributions (RMD’s) – The age at which RMD’s must begin was moved from 70 ½ to 72.  While many retirees tap into their retirement savings as soon as they retire, for more affluent retirees, this change will allow them to postpone their withdrawals and save the taxes they would otherwise pay for an additional 18 months.  That’s a positive change as it ultimately gives you more affluent clients a greater degree of control and flexibility in how and when they access their money.
  2. Stretch IRA’s - If your clients inherited their IRA before Dec 31st, 2019 then nothing has changed.  But if they inherit them starting in 2020, then they’ll need to withdraw all the assets within a 10-year period unless they meet one of the exceptions which include being a surviving spouse, a minor child, disabled or chronically ill or being less than 10 years younger than the decedent.  Generally, this rule is being perceived as a negative change.  The net result is to force individuals to liquidate inherited IRAs much more quickly which translates into faster tax revenue for the government, and over the long term, potentially less money for the beneficiaries.  The planning opportunity here for clients who might be passing qualified funds on to their kids or grandkids is to get them thinking about what else they can do to increase the amount they can pass on.  Life insurance is one example of a strategy that could help accomplish that goal, for example.
  3. Contribution Rules for IRA’s – The Act eliminates the age 70 ½ maximum age for contributing to a traditional IRA.  Now, as long as your client is working and has earned income, he/she can contribute to a traditional IRA.  This is a positive change as it allows older working Americans to continue to defer their taxes if they’re still working. 

As with any new legislation, the full impact won’t be known for many more years, but there are opportunities today to begin discussing with your clients once you understand the Act’s provisions. To help navigate the conversation with your prospects and customers, we've put together a customer-facing guide called "The Secure Act - What it is and What You Need to Know."  Contact DMI at 800.322.6342 to learn how you can qualify to have this document customized for you!

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Damon La Tanzi, Vice President - Sales

Damon LaTanzi is Vice President of Sales for DMI Marketing where he leads a team of talented life and annuity sales consultants. He has 20 years of experience in the insurance & financial services industries as an advisor, wholesaler, marketing manager, and sales manager. Successful agents and advisors typically partner with Damon and his team for at least 1 of the following reasons: They want to grow their sales and make more money but lack the time, resources or expertise to create a marketing plan. Their existing relationships run quotes and process applications but aren't doing anything else to help the agent/advisor to grow his or her business. Their existing relationships don't offer the proprietary annuity and life products DMI does and this really hurts their clients because the advisor may not be bringing them the right solutions.

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    DMI was founded in 1989 to provide financial advisors three dynamic elements for success: marketing services, sales consulting and business management.

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