The new year is the perfect break in the calendar that allows us to take off the old and put on the new.It’s like turning the page. It's a new chapter. It's a new book! You can't change the past, but you can change the future.
One way we can make a change is to set new goals, which we call New Year’s resolutions.
If you are considering financial resolutions, you might include getting debt under control, saving more for retirement, getting a head start on taxes, or reviewing health and life insurance options. It’s an ancient idea.
Did you know that there is evidence that the first resolutions were made by the Babylonians about 4,000 years ago? Julius Caesar reintroduced the practice when he established January 1 as the start of the new year in 46 B.C.E.
New Year’s resolutions are still made these days, but few follow through on them. According to a recent CBS News poll, only 29% of Americans had planned to make New Year’s resolutions this year, down from 43% in 2021. Moreover, Statista reports that only 4% who make resolutions accomplish all they set out to do; 8% meet most of their goals, and 16% meet some.
Let’s ask a question that seemingly has an obvious answer. Why is estate planning important?
First of all, when many hear the term “estate planning,” they quickly envision those who own mansions, various real estate holdings, large stock portfolios, expensive toys and priceless heirlooms.
Please, put that stereotype out of your mind. Everyone should have an estate plan or a will.
There are several reasons, but let’s touch on the most important. Your wishes are carried out, and you can prevent or discourage fighting among potential heirs by spelling out what each beneficiary will receive.
You decide—not a court, and thereby prevent the ugliness that could easily follow.
Many folks understand this, but common mistakes can surface, thwarting your intentions. And they can surface after it’s too late for you to do anything about it.
In late 2019, the president signed the SECURE (Setting Every Community Up for Retirement Enhancement) Act into law.
Required minimum distributions (RMDs) for employer-sponsored plans and IRA accounts were raised from 70 ½ years to 72 years old. It was a welcome change. The act also included smaller changes that aided workers in saving for retirement.
But the SECURE Act also changed the rules which govern inherited IRAs, or so-called stretch IRAs. The change in this provision was more controversial because it required faster distributions, at least in most cases.
Although the changes are recent, Congress is already considering what many are calling SECURE Act 2.0. As the bill winds its way through Congress, there is no guarantee of passage. But it enjoys widespread bipartisan support, and both the Senate and the House have drafted similar bills.
The devil is always in the details, but I am monitoring progress and believe now is a good time to provide a high-level overview.
Please feel free to check in with your tax advisor on tax-related matters.
