Proposed IRA Changes and Roth Tax Tips

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Last month some new IRA changes were proposed. How could these possible changes impact your financial future and your family’s?

The IRS is at it again!

It seems like every rule change is designed to make it more complex to manage
your IRA for yourself and your family.

On today’s episode of, Your Money & Your Life, we are going to explore some IRA
rules changes and Roth tax contribution opportunities.

A couple of weeks ago the IRS proposed some new rule changes to the Secure Act
(passed in 2019) that could affect inherited IRAs.

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Keep in mind, your IRA hasn’t been taxed prior to withdrawal and the balance is
not yet taxed even after you begin to withdraw the money. It’s kind of like a tax
lien on your money. There are two competing interests. You want the income to
enjoy your life and leave to your family and the IRS wants the money in the form
of taxes to fund the government. And more than ever, they want those taxes
sooner rather than later.

Once again rule changes are being proposed to the inheritance rules for IRAs. In
2019, beneficiaries were divided up into several classes. While this opened up
some planning opportunities, it also highlighted some big tax issues.
Now with these new proposed changes last month, the same heir may not only
need to empty the account by the end of year 10 but they may also need to take
out a required distribution in years 1 through 9, and pay taxes on those

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If a mistake is made or they miss a distribution they could be looking at a penalty
of 50%! But this all will hinge on when the original owner passes away. Crazy –

These rule changes can really impact generational wealth planning, so it’s more
important than ever to have a trusted financial advisor that can help you navigate
these complex rules. These are still proposed rule changes and the government is
taking public comments until June.

With tax season coming to an end this is a great time to remember the great tax
advantages of a Roth account. The money grows tax-free and there is no required
minimum distribution. The best part is there’s no 10-year rule for beneficiaries!

If you have any questions for Don reach out at (732) 784-2867 or

Listen to the full episode to learn more or skip around to certain topics.

[0:32] Spring has sprung

[2:27] IRS rule changes

[4:29]Inheritance rules

[6:47] New proposed required distributions

[7:49 ] When the original owner dies

[9:21] Designated beneficiaries

[11:37] Impact on generational wealth

[13:13]Make a comment to the government

[13:52]Roth tax advantages

[14:58] Tax planning tips for 2021

[17:35 ] What’s the catch?

[18:28]Is there a MAGI?

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Donald W. Cash – CPA, CFP®, is an independent advisor. After graduating from Rutgers University, he began his career in 1985 as an accountant. In 1990, he entered the field of Estate Planning, concentrating on long-term care planning. Don has been advising clients in the baby boomer and retirement market for 20 years. He has helped over 1,000 families with their planning needs.

Don advocates for a holistic approach to Estate and Financial Planning and has relationships with other professionals including Attorneys, CPA’s, Mortgage Specialists, Insurance Specialists and Asset Managers.

He is married to Cathy and they have 4 children, Carly, DJ, Nick and Tori. They live in Freehold, NJ.

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(732) 784-2867