Most of our clients reach financial independence through amassing large balances in their retirement plan and IRA accounts. In many cases, substantial amounts remain in their IRAs even at death. Before 2020, doctors could leave their IRA accounts to their children, grandchildren, etc., at death and they could stretch withdrawals from those accounts over their lifetimes. That provided maximum taxfavored growth while minimizing federal and state income taxes.

Congress saw this as a loophole and enacted the SECURE Act in late 2019 to stop it. That law requires most beneficiaries (except surviving spouses and minor children until 21) to clean out their inherited IRA accounts within 10 years from the owner’s death. Since IRA withdrawals are taxed at regular rates (up to 37%), the shorter 10-year window means bigger tax bills during the withdrawal years, particularly for high income beneficiaries.