The SECURE Act & the 2022 IRS Proposed RMD Regulations Results in The End of the Stretch IRA for Most Non-Spouse Beneficiaries

With the passage of the 2019 SECURE Act and the proposed regulations regarding RMDs that were published earlier this year in 2022,  the  so-called “stretch” IRA  has been officially eliminated in most cases when the beneficiary is not the spouse.  As a result, most non-spouse IRA beneficiaries are now required to empty their inherited IRAs in 10 years resulting in the collection of taxes much quicker by the Treasury Department. 

Old Rules Vs. New Rules

Prior to ne new rules, certain non-spouse beneficiaries (e.g., children and grandchildren) could stretch the IRA beneficiary disruptions over their life expectancy. For example, over 50 or 60 years depending on how your the child was; thereby, delaying having to pay taxes as quickly.

Under the new rules, the Department of the Treasury is effectively colleting the taxes due ono the beneficiary IRA much quicker by shortening the distribution period from the life expectancy of the beneficiary to 10 years.

The new proposed Treasury RMD rules impact both IRAs and qualified plans such as 401k plans including solo 401k plans.

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About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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