According to a Federal Reserve System report on the Economic Well-Being of U.S. Households in 2022–May 2023 in 2023, “3/4 of non-retired adults had at least some retirement savings, about 28% did not have any. This share who did not report any retirement savings was up from 25% in 2021. While most non-retired adults had some type of retirement savings, only 31% of non-retirees thought their retirement savings were on track, down from 40% in 2021.”
In 2019, the SECURE (Setting Every Community Up for Retirement Enhancement) Act was signed into law, and in 2022, SECURE Act 2.0 passed and amended its predecessor. The purpose of the SECURE Act was to assist Americans in saving for retirement by increasing access and encouraging contributions.
How does the new law affect estate plans? Prior to 2019, most retirement plan beneficiaries had the option to stretch taxable distributions and allow the assets to grow tax-free over the beneficiary’s life. The SECURE Act 2.0 changed the stretch rules to apply to only a limited group — Eligible Designated Beneficiaries. So most beneficiaries will have to take distributions within 10 years.
Contact your estate planning attorney and financial advisor to review your financial and estate planning goals, and to ensure your retirement accounts name the proper beneficiaries.
STEPHEN B. YIM, ATTORNEY AT LAW
2054 S. Beretania St., Honolulu, HI 96826
808-524-0251 | stephenyimestateplanning.com
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