On this episode, Charles Musgrove and guest Taylor Hodges from Southern Capital discuss a variety of topics including:
- The 529 College Savings Plan and how the 2019 SECURE Act has expanded the use of the plan assets
- The Safe Harbor provision
- Non-ERISA plans or the Golden Handcuff and practical examples
- Distributions from inherited retirement plans
- Balance of tax deferred vs after tax savings
- 2019 SECURE Act:
- Small business owners will receive a tax credit for establishing a retirement plan
- Additional tax credit for adopting auto enrollment
- New provisions to allow part-time employees with less than $1,000-hours to join 401K
- Elimination of stretch provisions for beneficiaries
- With a few exceptions, most non-spouse beneficiaries will have 10 years to withdrawal 100% from the inherited IRA – No RMDs during 10-year window
- Will count as income to beneficiary – Shift assets to tax-free?
- RMD age pushed back to age 72
- Only for people who turn 70 ½ after January 1, 2020
- Everyone should check to make sure their beneficiaries are updated
- If beneficiary is a Trust, understand how it may effect beneficiary amounts and taxes on distributions
- Executive Benefits
- Goal for business owners is to attract, retain and reward good employees
- ERISA – 401K, SEP, ESOP
- Non-ERISA – NQDC, Phantom Stock, Golden Handcuff
- Different for 8(a) companies due to program restrictions on income and net worth
- Specialize in 8(a) – Unique planning process
- Articles
- The Hierarchy Of Tax-Preferenced Savings Vehicles For High-Income Earners:
- https://www.kitces.com/blog/hierarchy-tax-preference-savings-vehicle-roth-high-income/
- Tax Brackets Resource:
- https://www.nerdwallet.com/blog/taxes/federal-income-tax-brackets/
- 2019 SECURE Act:
- https://www.kitces.com/blog/secure-act-2019-stretch-ira-rmd-effective-date-mep-auto-enrollment/
- Don't Die Yet: New U.S. Law Will Muddle Estate Plans:
https://www.kitces.com/blog/tax-rate-equilibrium-for-retirement-taxable-income-liquidations-rothconversions/