Retirement

There’s some relief from IRS on the 10-year payout rule for inherited IRAs. 

A controversial proposed regulation won’t take effect until at least 2023. Under the SECURE Act, many non-spousal beneficiaries of IRAs inherited after 2019 must clean out the account within 10 years. In Feb., IRS proposed regs on this rule stating that if the deceased IRA owner died before his or her first beginning date for taking required minimum distributions, then payouts needn’t be distributed evenly over a 10-year period. Instead, beneficiaries can take annual distributions, they can wait until year 10 to take out all the money, or they can skip years, provided the IRA is fully depleted within 10 years. The proposed regs go on to say that if the deceased IRA owner dies after the RMD beginning date, then annual RMDs must be paid to the beneficiary in years 1 through 9, with the rest of the account fully depleted by year 10. IRS is still working on finalizing the regs. In the meantime, beneficiaries won’t be penalized for not taking distributions in 2021 or 2022. 

There’s growing red-state backlash to ESG investing in state retirement plans.

Mutual funds that choose investments based on environmental, social responsibility or governance factors have become increasingly popular with investors over the years. Some red states are now taking action. They’re trying to ban banks and asset managers that consider ESG criteria from handling state retirement and pension funds. Take Texas. It has a law on its books that restricts its state pension funds from investing in companies that divest from fossil fuels. The Texas comptroller recently accused BlackRock and other mutual funds of boycotting energy companies. And Fla. Its pension board passed a resolution banning ESG factors. Several other states with GOP governors also have anti-ESG platforms. 

Danielle LaFace