What is the SECURE Act?
The SECURE Act, which was officially enacted on Jan. 1, 2020, is now the largest retirement reform to impact the economy since the Pension Protection Act of 2006.
The SECURE Act has brought significant change to the beneficiary payout options of IRAs and other qualified accounts. Secure Act did not change the payout rules for beneficiaries of nonqualified annuities (both deferred and immediate).
For the beneficiaries of nonqualified annuities, the potential wealth transfer effectiveness of life expectancy-based payments is still a tool that we can use to meet inheritance planning goals.
In regard to Non-Spousal Inherited IRAs (Qualified Money), Nationwide Peak 10 could be a solution for these cases. Please note, for most individual non-spouse beneficiaries the payout requirement is 10 years when the owner dies in 2020 or thereafter. There are several exceptions that still allow a life expectancy-based payout:
- Spouses
- Minors
- Individual with disabilities
- Chronic Illness
- Individuals that are less than 10 years younger
A great solution for retirement planning to fit these needs is the Nationwide Peak 10 fixed index annuity. Several things to keep in mind when positioning Nationwide as a solution:
- With Peak 10 being a 10-year contract, the purchase of the new annuity needs to happen in the same year of death. From a Suitability perspective, Nationwide would be unable to accept this business if the death occurs in the prior year (10-year rule and Peak 10 being a 10-year contract).
- Account must be liquidated by 12/31 of the 10th year after the owner’s death.
- Life expectancy payouts may continue where the owner died prior to 2020
- The 10 Year Rule does not require annual or periodic distributions
- Spousal Protection Feature is available on these contracts
- Living Benefits are not available
The annuity team at Pinnacle Financial Services is here to assist with all your case design solutions.
Reach out to a team member at 800-772-6881 x-6003 or email annuity@pfsinsurance.com
1 (800) 772-6881 x7731 | sales@pfsinsurance.com
Bob Brzyski
Vice President | Marketing & Business Development
Contact a Pinnacle Representative if you have any questions.
1 (800) 772-6881
support@pfsinsurance.com
