It May Be Useless By the End of the Year Have a Trust?
In May, the House of Representatives overwhelmingly voted in favor of the SECURE Act, with 417 votes to 3. Short for Setting Every Community Up for Retirement Enhancement, the SECURE Act of 2019 still has to go through the Senate, but with bipartisan support, it is likely to pass.
Withdrawing over time can cause problems, as well. Let’s say you’re in the middle of putting your kids through college. If you’re paying for tuition with loans that are based on your income and you withdraw from the IRA, you could change your income status. If it becomes too high, you may lose access to those loans. A lot of people put their IRA into a trust so their beneficiaries don’t have access to it all at once. There’s a saying: The only reason to set up a trust is when you don’t trust someone. You might be worried that your kids or grandkids won’t be able to manage the money. Or, if there is a chance they could be sued, that money would be on the line. Families face countless scenarios that justify using trusts. When you put the IRA money into a trust, it’s protected. Creditors can’t get to it, and the money can be dispersed a little at a time. The downside of putting the money into a trust is the taxation. If left in a trust, the tax rate is very high. In the past, people set up “conduit trusts.” The IRA money passes through the trust to the beneficiaries. However, because most beneficiaries will no longer have RMD’s with this new law, the money would now sit in the trust exposed to the high tax rates in trusts.
While the SECURE Act may have support in Washington, it has also raised a lot of questions among retirees about what to expect.
One minor thing the act changes is the age when you must start taking your required minimum distributions. Right now, it’s at age 70 1/2. Should the act pass, it would be bumped to age 72. The main issue with the act, however, is how it changes IRAs. Currently, if a person doesn’t spend their IRA before they pass away, the remainder usually goes to their kids, grandkids, or other heirs. Through this process, the heirs (nonspousal) could create what’s called a “stretch IRA,” continue to grow the money in the IRA, and withdraw smaller required amounts based on their own birthdate. Ideally, the IRS wants you to deplete your IRA before you pass away. They want your savings spent, not to have them sit there from generation to generation. This is why your RMDs increase once you turn 70 1/2 — they want you to take more as you age. Your heirs don’t have to worry about sizable RMDs. Depending on their age, it’s likely they will take more manageable amounts that are just small enough that the IRA can continue to grow. This process has benefited a lot of families, but the SECURE Act aims to change this. Last month, I told you your IRA was under attack, and the SECURE Act represents another reason why an IRA is the worst type of account to put your money into. If the SECURE Act passes in the Senate, IRAs will be even worse. Your beneficiaries will no longer have the stretch-IRA option. Instead, your beneficiaries will have to deplete the account within 10 years or face penalties. This 10-year requirement does not apply to spouses, minor children, or children with disabilities. If your beneficiaries wait until the 10- year mark to withdraw, they face a massive tax bomb.
That said, strategies like the stretch IRA and the conduit trust may be going away. Once the SECURE Act passes, new strategies may emerge.
For instance, people still may be able to utilize tax-bracket management. Even with a 10-year limit, your beneficiaries may be able to take out just enough money to avoid going into the next tax bracket, thus paying more taxes. It’s a fairly common strategy and one to keep in mind going into next year. Of course, you can always convert your traditional IRA to a Roth IRA. If you have a Roth IRA, you don’t have to worry about taxes. High trust tax rates won’t matter. There will never be a tax time bomb waiting around the corner
for your beneficiaries. Life insurance is another option to consider if you want to avoid taxation. Whatever you choose, we’re here to help inform you of your options and recommend the best route to take in your specific case.
THE 4-LEGGED HEROES OF GROUND ZERO
In the immediate aftermath of 9/11, thousands of New Yorkers took to the streets to clear rubble, offer supplies, and search for survivors. It was a
both physically and mentally exhausting for the dogs during their shifts. Some dogs that found deceased victims refused to eat or interact with other animals. Search and rescue dogs became increasingly stressed and depressed the longer they searched without any results, mirroring their handlers. It wasn’t uncommon for handlers to stage mock “findings” of survivors to keep the dogs’ spirits up. Fortunately, the sacrifices these dogs and their handlers made did not go unnoticed. Many dog owners were inspired to earn their search and rescue certifications after the events of 9/11, promising to aid in future disasters and hopefully lessen the impact of such catastrophes. After 9/11, various researchers conducted many studies examining the effect this kind of work has on animals, both physically and mentally. Many of these studies wouldn’t be possible without the AKC Canine Health Foundation, so if you’re looking to give back this September, visit them at their website to see how you can help: AKCCHF.org .
powerful act of resilience in a deeply trying time, and while most of the individuals helping with the disaster stood on two feet, more than 300 canines also answered the call to service. Dogs of all breeds and backgrounds, including search and rescue dogs, police dogs, service dogs, and therapy dogs, were brought in to help find and care for survivors in the wake of the destruction. They worked tirelessly alongside rescue crews as they searched through the debris. Search and rescue dogs and their handlers worked 12–16-hour days, searching for survivors and victims. They worked through dangerous conditions: Many dogs burned their paws as they dug through hot rubble, and both handlers and canines inhaled toxic dust. The task was If you feel like you’ve hardly seen your kids since the school year started, you’re not alone. Americans are way too busy — from childhood onward, we’re always running hither and thither, packing in as many after-school activities, work-related meetings, and social engagements as possible. It’s a problem so pervasive that it has a name: time scarcity. Families feel time scarcity keenly after school starts in September, when children’s schedules explode with engagements. But all hope for close ties isn’t lost; there are ways to stay connected with your spouse and kids, even in an increasingly busy world. Here are some ideas from counselors, teachers, and psychologists who claim to have mastered the art. Remember Your Rituals Rituals make up the backbone of individual families and society at large. Most people wouldn’t dream of abandoning their holiday traditions, so why forgo the smaller rituals that bring families together? Whether it’s eating dinner at the same table each evening, watching a movie together every Thursday night, or going on a monthly getaway, make sure these traditions aren’t canceled. If your family doesn’t have many rituals, a great way to connect is to start some. STAYING CONNECTED
Make Every Moment Count
As cliche as it sounds, when you don’t have much time together, it’s crucial to be present for every minute of it. If you have a rare half-hour at home with one of your kids, make a point to spend it in the same room and try to start a conversation. If you squeeze in a romantic dinner with your spouse, turn off your phones before the food comes. Listening to each other without distractions will strengthen your relationship. Hug It Out
Physical contact is vital for closeness. When you get the chance, hug your kids, hold hands with
your spouse, and do physical activities as a family, like hiking, biking, or even playing group sports. It’s been scientifically proven that physical closeness leads to emotional closeness, so if you’re low on time, take advantage of that shortcut!
PREVENT COLDS AND THE FLU WITH KID-FRIENDLY TEACHING TOOLS
Ahh ... Ahh ... ACHOO!
School is back in session, but your child may be bringing home more than just random facts. Germs and bacteria that spread the common cold and flu are most prevalent in schools, but while these illnesses are strong, prevention is simple. Teach your kids how to prevent the spread of bacteria this season with these helpful tips. But Mommy Doesn’t Cover Her Nose! Kids learn more by watching what you do rather than listening to what you tell them to do. Get in the habit of covering your nose and mouth when you cough or sneeze, and then wash your hands. Make hand sanitizer and facial tissues readily available in your home and be sure to wash your hands before every meal. In addition, stick to healthy habits when you do feel sick. Drink fluids, get plenty of rest, and seek medical attention when it’s warranted. If your children see you taking care of yourself, they will be more likely to do the same for themselves in the future.
Hand washing and nose blowing are about as fun as … well, just that. It’s no wonder children don’t want to take time out of their busy play schedules to combat nasty germs. Instead of making these important steps a chore, make basic hygiene fun. Use fun songs to teach the proper way to cover a sneeze, or do a science experiment to teach your children about the germs that are spread through just one sneeze. (According to research, sneezes can travel anywhere from 19–26 feet at 100 miles per hour!) For crafty kids, let them decorate tissue boxes or hand sanitizer containers to give hygiene some flair. Soon enough, you’ll find them being smarter about their health. As kids pack into classrooms this fall, germs will fly faster than this past summer did. Prevent the spread of the common cold and flu by learning more tips from the Centers for Disease Control and Prevention online at CDC.gov.
STOP THE SPREAD
Cacio e Pepe
Inspired by Bon Appétit
6 oz pasta, ideally spaghetti or bucatini 3 tbsp unsalted butter, cubed and divided Italian for “cheese and pepper,” cacio e pepe is like a refined version of mac and cheese. It’s crowd-pleasing enough to satisfy the pickiest eaters and refined enough to sate the foodies. Ingredients
• • • •
1/3 cup finely grated pecorino cheese Kosher salt, for pasta water and to taste
1 tsp freshly ground black pepper 3/4 cup finely grated Parmesan cheese, ideally Parmigiano-Reggiano
1. In a large pot, bring 3 quarts of salted water to a boil. Add pasta and cook, stopping 2 minutes short of desired doneness. Drain pasta, reserving 1/2 cup of pasta water. 2. In a large pan over medium heat, melt 2 tbsp butter. Add pepper and cook until toasted and aromatic, about 1 minute. Add reserved pasta water and bring to a simmer.
3. Transfer pasta and remaining butter to pan and reduce heat to low. Add Parmesan cheese and cook until melted, tossing pasta throughout. Remove pan from heat and add pecorino, continuing to toss until cheese is melted and sauce coats pasta.
4. Transfer to bowls and serve.
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INSIDE This Issue Your Trust May Be Useless By the End of the Year How to Keep Your Family Close in a Busy World Teach Your Kids Flu Prevention Cacio e Pepe The Vibrant Colors of America’s National Parks Honoring the Canines of 9/11
Have you ever wanted to experience the colors of a Boston fall while enjoying the peace and tranquility of the great outdoors? Autumn leaves are a universally appreciated sign of the changing seasons, and there’s no better place to see those vibrant yellows, oranges, and reds on display than in one of America’s national parks. So, if you’ve got some free time this autumn, here are some parks worth seeing. Acadia National Park, Maine While the maple, birch, and poplar trees of Acadia begin to change color in September, mid-October is the best time to witness autumn in full swing. The park is crisscrossed with unpaved trails that date back to a time of horse-drawn carriages, preserving an idyllic setting. If you want to see the colors in full effect, take a drive to the top of Cadillac Mountain, the highest point along the North Atlantic seaboard, and watch the sun crest over the vibrant leaves. To fully experience fall in the Northeastern U.S., Acadia National Park is a must-see. Great Smoky Mountains National Park, Tennessee and North Carolina Further south, the autumn colors of the Smoky
Mountains are no less breathtaking than those in the Northeast. This park offers many scenic lookout points accessible by car, so don’t worry about hoofing it into the forest if that’s not your thing. Park wherever you like and watch the warm colors of ancient maples, oaks, and cedars change before your eyes. Grand Teton National Park, Wyoming While the West might typically be associated with evergreen pines, the deciduous trees of the relatively small Grand Teton National Park pack a colorful punch starting around the third week of September. It’s also breeding season for elk in the area, and their high, eerie whistles can be heard in the evenings. Popular destinations in the park include the Christian Pond Loop and String Lake. Just because the weather is cooling down doesn’t mean you have to abandon your favorite national parks until next summer. The natural beauty of America can be experienced at any time of the year, so start planning your next autumn outdoor excursion!
The Best National Parks to Visit This Fall
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