Provided courtesy of Michael J Krupa, Krupa Wealth Management

The $1.4 trillion spending package enacted on December 20, 2019, included the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which had overwhelmingly passed the House of Representatives in the spring of 2019, but then subsequently stalled in the Senate. The SECURE Act represents the most sweeping set of changes to retirement legislation in more than a decade.

While many of the provisions offer enhanced opportunities for individuals and small business owners, there is one notable drawback for investors with significant assets in traditional IRAs and retirement plans. These individuals will likely want to revisit their estate-planning strategies to prevent their heirs from potentially facing unexpectedly high tax bills.

All provisions take effect on or after January 1, 2020, unless otherwise noted.

Elimination of the “stretch IRA”

Perhaps the change requiring the most urgent attention is the elimination of longstanding provisions allowing non-spouse beneficiaries who inherit traditional IRA and retirement plan assets to spread distributions — and therefore the tax obligations associated with them — over their lifetimes. This ability to spread out taxable distributions after the death of an IRA owner or retirement plan participant, over what was potentially such a long period of time, was often referred to as the “stretch IRA” rule. The new law, however, generally requires any beneficiary who is more than 10 years younger than the account owner to liquidate the account within 10 years of the account owner’s death unless the beneficiary is a spouse, a disabled or chronically ill individual, or a minor child. This shorter maximum distribution period could result in unanticipated tax bills for beneficiaries who stand to inherit high-value traditional IRAs. This is also true for IRA trust beneficiaries, which may affect estate plans that intended to use trusts to manage inherited IRA assets.

In addition to possibly reevaluating beneficiary choices, traditional IRA owners may want to revisit how IRA dollars fit into their overall estate planning strategy. For example, it may make sense to consider the possible implications of converting traditional IRA funds to Roth IRAs, which can be inherited income tax free. Although Roth IRA conversions are taxable events, investors who spread out a series of conversions over the next several years may benefit from the lower income tax rates that are set to expire in 2026.

Benefits to individuals

On the plus side, the SECURE Act includes several provisions designed to benefit American workers and retirees.

  • People who choose to work beyond traditional retirement age will be able to contribute to traditional IRAs beyond age 701⁄2. Previous laws prevented such contributions.
  • Retirees will no longer have to take required minimum distributions (RMDs) from traditional IRAs and retirement plans by April 1 following the year in which they turn 701⁄2. The new law generally requires RMDs to begin by April 1 following the year in which they turn age 72.
  • Part-time workers age 21 and older who log at least 500 hours in three consecutive years generally must be allowed to participate in company retirement plans offering a qualified cash or deferred arrangement. The previous requirement was 1,000 hours and one year of service. (The new rule applies to plan years beginning on or after January 1, 2021.)
  • Workers will begin to receive annual statements from their employers estimating how much their retirement plan assets are worth, expressed as monthly income received over a lifetime. This should help workers better gauge progress toward meeting their retirement-income goals.
  • New laws make it easier for employers to offer lifetime income annuities within retirement plans. Such products can help workers plan for a predictable stream of income in retirement. In addition, lifetime income investments or annuities held within a plan that discontinues such investments can be directly transferred to another retirement plan, avoiding potential surrender charges and fees that may otherwise apply.
  • Individuals can now take penalty-free early withdrawals of up to $5,000 from their qualified plans and IRAs due to the birth or adoption of a child. (Regular income taxes will still apply, so new parents may want to proceed with caution.)
  • Taxpayers with high medical bills may be able to deduct unreimbursed expenses that exceed 7.5% (in 2019 and 2020) of their adjusted gross income. In addition, individuals may withdraw money from their qualified retirement plans and IRAs penalty-free to cover expenses that exceed this threshold (although regular income taxes will apply). The threshold returns to 10% in 2021.
  • 529 account assets can now be used to pay for student loan repayments ($10,000 lifetime maximum) and costs associated with registered apprenticeships.

Benefits to employers

The SECURE Act also provides assistance to employers striving to provide quality retirement savings opportunities to their workers. Among the changes are the following:

  • The tax credit that small businesses can take for starting a new retirement plan has increased. The new rule allows employers to take a credit equal to the greater of (1) $500 or (2) the lesser of (a) $250 times the number of non-highly compensated eligible employees or (b) $5,000. The credit applies for up to three years. The previous maximum credit amount allowed was 50% of startup costs up to a maximum of $1,000 (i.e., a maximum credit of $500).
  • A new tax credit of up to $500 is available for employers that launch a SIMPLE IRA or 401(k) plan with automatic enrollment. The credit applies for three years.
  • With regards to the new mandate to permit certain part-timers to participate in retirement plans, employers may exclude such employees for nondiscrimination testing purposes.
  • Employers now have easier access to join multiple employer plans (MEPs) regardless of industry, geographic location, or affiliation. “Open MEPs”, as they have become known, offer economies of scale, allowing small employers access to the types of pricing models and other benefits typically reserved for large organizations. (Previously, groups of small businesses had to be affiliated somehow in order to join an MEP.) The legislation also provides that the failure of one employer in an MEP to meet plan requirements will not cause others to fail, and that plan assets in the failed plan will be transferred to another. (This rule is effective for plan years beginning on or after January 1, 2021.)
  • Auto-enrollment safe harbor plans may automatically increase participant contributions until they reach 15% of salary. The previous ceiling was 10%.

This information, developed by an independent third party, has been obtained from sources considered to be reliable, but Raymond James Financial Services, Inc. does not guarantee that the foregoing material is accurate or complete. This information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Investments mentioned may not be suitable for all investors. The material is general in nature. Past performance may not be indicative of future results. Raymond James Financial Services, Inc. does not provide advice on tax, legal or mortgage issues. These matters should be discussed with the appropriate professional.  Content prepared by Broadridge Investor Communication Solutions, Inc.


ChildLifeIns_SageMar20Let’s face it: Thinking about the death of your child is almost more than you can bear. But you’ve seen those sweet baby-faced commercials urging you to buy life insurance for your child, and you wonder whether it’s a good idea. After all, you’d do anything for your kids.

So, what’s the right thing to do? Here’s the honest truth: Getting life insurance for your kids is not the best option for your family. We’ll explain all the choices without any emotional hype so you can make an informed decision.

Why People Buy Life Insurance for Kids

If buying life insurance for kids is such a bad idea, why do so many people do it? For one, advertisers do a great job of pulling at your heartstrings to make you think it’s the best thing since home delivery for your groceries. But there are some other myths people believe about life insurance for kids. This is what you’ll hear:

Myth #1:

It provides a savings vehicle for my child’s education.

You’ve probably seen this as a feature of whole life insurance for children. The idea is that the monthly premium will build up savings for college. Sounds great, right? Not so fast.

First, the fees will eat away at your return. And the return isn’t great—about as much as a traditional CD (Certificate of Deposit) you’d get at a bank. Not only that, but you’ll also have to pay fees to get your money when it’s time to pay tuition. In what world is this a good idea? Not the real world—that’s for sure.

Myth #2:

It guarantees my child can get more life insurance later.

Some parents and grandparents want to make sure their kids can get good life insurance even if the kids develop a medical problem early on.

The truth is, most people in their 20s and 30s have no problem getting a good term life insurance policy, so there’s really no need to buy life insurance for your kids.

If you do buy life insurance for your kids and they want to carry their policy into adulthood, they can only get a limited amount added to it. And in many cases, that amount is too small to provide for their family long-term.

Myth #3:

It covers funeral expenses and other costs.

Yes, life insurance would cover funeral expenses, but the likelihood of actually needing it is so slim that you’re better off putting the monthly premium payments into a savings account. Then you retain control of that money and can use it for other reasons, like if your child needs their tonsils taken out. And that type of emergency is much more likely to happen!

Alternatives to Children’s Life Insurance

If you don’t buy life insurance for your child, how do you pay for burial expenses if the unthinkable happens? We’ve got an easy fix. Instead of paying premiums, you can put that money in an emergency fund. If you stash away three to six months of living expenses, you can cover the cost of a funeral—or any other emergency that might pop up along the way.

If you don’t have that money stashed away yet, you can get a rider for your children on your term life policy (or your spouse’s). A rider is an add-on to a basic policy. Think of it like adding bells and whistles to your car.

This kind of rider is pretty cheap—around $50-60 a year—and it covers all your kids, no matter how many you have, until they are no longer member of your household (that’s what Dave did for years).

How to Invest in Your Child’s Financial Future

As a parent, you want to set your child up for success—especially when it comes to money. So if you were thinking about getting life insurance for your kids as a way to start them out on the right financial foot, here are some better ideas than opting for a life insurance gimmick:

  • Open a college fund. Basically, there are two kinds of college funds: a 529 plan and an ESA (Education Savings Account). There are pros and cons to both, but either one would be a much better choice than a whole life insurance policy. As a plus, you get some tax benefits!
  • Open an IRA. An Individual Retirement Arrangement is a great way to get your kids started out right. You don’t have to fork over a whole lot of cash to open one, and you can add to it a little at a time. You can even offer to match any money your child puts in it, showing them the value of an employer match!
  • Open a custodial account. You might have heard of the UGMA (Uniform Gift to Minors Act) and the UTMA (Uniform Transfer to Minors Act). Fancy words, simple concept: Think of a savings and investing account that minors can’t touch until they become adults. But there are lots of rules with these accounts (for instance, this money counts against your child’s financial aid), so know what you’re getting into first.

Do You Need Life Insurance for Your Child?

The reason you buy life insurance is simple: It replaces your income if you pass away and helps your family take care of their financial needs when they can no longer rely on your income. But since you don’t depend on your child’s paycheck (they depend on yours!), there’s no need to buy a policy for your kids. It’s easier and cheaper to get a rider on your own term life policy.

Here’s the deal: You love your children and want to start them out on the path to success but getting a life policy on them is the wrong road. The best insurance move for your family is for you and your spouse to get term life insurance. That way, if the unthinkable happens and one of you passes away, you know the policy will replace your income and put your kids in the best spot possible.

© Lampo Licensing, LLC. All rights reserved.

Josh specializes in retirement income strategies, investments strategies, as well as additional financial strategies.  His focus is on lifelong financial guidance and his commitment is to place clients first and provide unmatched customer service. He would be glad to answer any questions regarding the content of this article as well as any others.  Call today at 570-729-1020 or email Josh at  You can also visit

Jonathan Sheard offers securities and advisory services through Centaurus Financial, Inc. member FINRA and SIPA and a registered investment advisor.   This is not an offer to sell securities, which may be done only after proper delivery of a prospectus and client suitability is reviewed and determined. Information relating to securities is intended for use by individuals residing in PA, NY, AR, VA, FL, NC, GA, CT.

Sage Investments and Centaurus Financial Inc are not affiliated.


Zillow-logo-earnings-cbc4a7Constant advances in technology make it easier for us to do the simplest tasks, from buying groceries to finding a destination ten minutes away. The housing market isn’t any different, and websites like Zillow make it possible for people to do all their “real estate homework” prior to speaking with a licensed real estate professional.

Founded in 2005, Zillow is the leading online real estate marketplace on the Web and mobile apps, where users can easily find information on homes, townhouses, condos, and apartments. Zillow has data on millions of homes across the country, not just those currently for sale but also those not yet on the market, such as pre-foreclosures. In addition to giving value estimates of homes, the site offers value changes of each home in a given time frame, aerial views of the homes, and prices of comparable homes in the area.

Research indicates Zillow’s website activity continues to grow each year with increased numbers of visitors. Over the past several years, Zillow launched new features such as mobile apps, an online advice service, real estate market reports, and a mortgage marketplace.


How do local realtors feel about sites like Zillow ?

Bridget Gelderman, a Realtor at Davis R. Chant Realtors Hawley office, offers her insights and opinions:

“Websites like Zillow,, and Trulia can be helpful in the initial search to locate homes and narrow down areas of interest; however, the information is often not always accurate on these websites. These websites do not play by the National Association of Realtors Code of Ethics, and for consumers, this is a big deal. Zillow falls short with its valuations on homes. These “Zestimates” can be way off. For example, in Wayne County, the Zestimate Accuracy Star Rating is a “1” star out of 5 stars, 5 being the best. Basically, they are unable to compute Zestimate accuracy, yet they still put a Zestimate out there. Pike County is a “2” star rating. was recently acquired by Zillow. They highlight a wide range of features like school information, crime, and tips on their homepage. This site’s photo feed pulls very poor quality photos.”

“The bottom line is while all these websites are helpful, go directly to a broker’s website to get additional information on the home or market and then use a realtor to navigate through the home buying or selling process. For most people, buying a home is the largest financial investment they will ever make. There are big decisions to be made, and emotions come into each and every one, both on the buyer side and the seller side. Having an expert help lead through the process is critical in securing the best deal with the least amount of headaches.”


Bridget Points Out Other Key Factors:

  1. When you work with a realtor, their fiduciary responsibility is to look out for the customer’s best interests since they subscribe to a strict Code of Ethics.
  2. There are ever changing rules and regulations from changes on how to obtain a mortgage to zoning issues. The realtor assists with all these issues.
  3. There are pros and cons to each property, and a realtor can help direct the customer through the ins and outs of a community, township and any issues that could be possible within the construction of a home. They have a resource of experts that provides invaluable information before spending a life’s savings.
  4. When it comes to pricing and selling your home, a realtor has access to tax records and data that is current and can provide a customer with a Comparable Market Analysis (CMA) of a recommended list price for a home based on what has happened in the market.
  5. Realtors can help lead through negotiations and contracts. Once the excitement has settled from finding the right home, the real work begins. Navigating the negotiations and making sure the customers understand what they’re signing is a large part of a realtor’s job. They help throughout the entire process and keep all people involved on track for a smooth closing.


To contact Bridget Gelderman at Davis R. Chant Realtors, call (570) 226-4518, email, or visit