For years, IRA payout rules have not changed and have even become simpler and easy to plan for. A new bill set to pass Congress could change all of that and make inheriting an IRA more expensive than ever. Under the SECURE Act, save from a few exceptions, upon the death of an IRA owner, the deceased’s IRA or other Qualified Plan (like a 401k) MUST be paid put to the beneficiary in just ten years. In other words, no more stretch IRAs. This change is designed to raise enough revenue to pay for the SECURE Act that will allow, among some other provisions, older Americans to still make contributions to Qualified Plans and IRAs, and delay withdrawals until a later age. Currently, withdrawals must start at 70 1/2. Under the SECURE Act, it will increase to 72 or 75 (depending on what version passes).
We will keep you updated and make sure you’re aware of how this could impact your planning.