Axiom | Vol 266

Fear & Greed Still Leans Fear As Markets Continue Climb | August Is National Make A Will Month

Meet The Axiom®’s Guest Editor: Bryan Fiore, CRPC®, CSRIC™

I am Bryan Fiore, Wealth Manager and Branch Director for our Naples / SW Florida office.

I’m Bryan Fiore, Wealth Manager and Branch Director for our Naples / SW Florida office.

I enjoy getting to know people and hearing about their experiences on our planet. I also build awareness and connections with Annex Wealth Management and the SW Florida community.

Like many, I enjoy the challenges and nuances of our financial markets. My job lets me partner with people to help them plan their financial future to help reach their goals.

I grew up a child of a USA Army family with a brother two years older than me. My father and brother had careers in the army. My entire family – including my wife and two children – like sports and being active.


I appreciate our Axiom in that it is a consistent, time-friendly source of information. Each week we get a summary of our investment team’s thoughts, a question or two from clients or readers, and a few topics of interest. Best of all, the Axiom is a quick read. It doesn’t take long to enjoy and get informed.

– Guest Editor:

Bryan Fiore, CRPC®, CSRIC™ | Branch Director, Naples Office


Fear & Greed Still Leans Fear As Markets Continue Climb

The “E” in the P/E ratio keeps multiples low as a fantastic earnings season and a low fear and greed index buoy the markets. Annex Wealth Management’s Derek Felske and Deanne Phillips discuss.


18-34 year olds are now more likely to have a will than 35-54 year olds. And only 21% of people over 55 have a will.

Poll: Do You Have A Will?


Make sure you’re ready for the huge impact the SECURE Act could have on your plan

The pandemic brought changing paradigms and extensive legislation over the last 18 months. While all the changes have been hard to digest, we’ve noticed some are not aware of the impactful changes in the SECURE Act, which passed in December 2019. The SECURE Act brought about 29 different changes, many of which significantly affect retirement plans and IRAs. To further complicate the matter, the CARES Act of 2020 effectively delayed some of the impact of the SECURE Act.

This week’s Money Do: take a look at the two biggest changes of the SECURE Act and consider if additional planning is required for your financial and estate plans.

If you’re wondering how some legislation from 2019 could alter your plan, consider the two most impactful SECURE Act changes:

· Permanently changing the RMD age from 70.5 to 72

· Eliminating the “Stretch” IRA for most beneficiaries

RMD Changes

The RMD changes are important to review within the scope of your financial plan, as the additional year or two before you are required to start taking RMDs extends your opportunities to do Roth Conversions.

Additionally, while the RMD age is now 72, the age to do a Qualified Charitable Distributions from your IRA continues to be 70.5. As such, there is some opportunity to be charitably included and reduce your IRA balance and subsequent RMDs prior to the time when the RMDs become required.

The Impact Of Eliminating The Stretch IRA

The elimination of the Stretch IRA can have some unintended consequences when a non-spouse inherits an IRA. Prior to the SECURE Act, a non-spouse beneficiary of an IRA had the option of rolling the funds into an Inherited IRA, whereby the

beneficiary could “stretch” out the income tax consequences over their life expectancy with small RMDs.

The SECURE Act eliminated the “stretch” option for all but a few classes of individuals:

1) Surviving Spouses

2) Chronically Ill Individuals

3) Disabled Individuals

4) Individuals that are not more than 10 years younger than the account owner

5) Minor Children of the account owner, but only until the age of majority (note: grandchildren are not eligible under this rule).

So, if you inherit an IRA from someone who died in 2020 or later and are a non-spouse, you’re likely going to fall under the new “10-Year” Rule.

The “10-Year” Rule still allows you to roll over the funds into an Inherited IRA, but instead of having your lifetime to spread out the income taxes, you have to fully drain the IRA funds within 10 years after you inherit the funds, thereby accelerating the income tax recognition on the beneficiary.

Grandfather Possibilities

The good news is, if you previously inherited an IRA from someone who died prior to 2020 and have an inherited IRA, those accounts are grandfathered and will continue as “Stretch” IRAs for your lifetime.

Knowing these changes are important to individuals who stand to inherit IRA funds, as proper tax planning for those individuals has become more important than ever before.

Review Your Plan – Get Help If You Need It

For those who have IRAs and want to pass them along to family members, it’s important to have be aware of these new rules as well. Be sure to review your beneficiary designations. If you’re leaving IRAs to any trusts as part of your estate plan, talk to your estate planning attorney to make sure you’re doing so in the most tax-efficient manner possible.


This week’s Ask Annex comes from Rick, who asks:

“My wife and I are preparing our wills, is there a way to ensure that our beneficiaries don’t get placed into a higher tax bracket?”


We asked Annex Wealth Management’s Tom Berkholtz, CFP®:

Great question – One of the major changes made by the 2019 SECURE Act was the elimination of the stretch IRA for many beneficiaries, such as children. The old rule allowed a tax strategy for children with inherited IRAs to withdraw only a required minimum distribution each year based on their own life expectancy thus stretching the taxable income potentially over many years. The new law mandates inherited IRAs after Dec. 31st, 2019, to be emptied within 10 years of the death of the original account owner. “Fortunate” timing could start the 10-year window during the children’s low/no income years resulting in a lesser tax impact. Or this gift could unintentionally bounce children up into higher tax brackets, especially kids who are still working and high-income earners. The good news is with proper tax planning, future generations can still potentially receive an inheritance without these taxable strings attached.

Parents who can strategically fill up lower tax brackets with Roth conversions can help shift some money to the tax-free bucket.

Roth conversions can be carefully timed during low-income years thus maximizing the amount of pre-tax dollars converted from an IRA to a Roth IRA. The idea is pay the taxes now during a historically low tax rate environment, the money grows tax free insulated from future tax rate hikes, with the remainder passing to children income tax free.

All in all, depending on age, income, and stage of life, it can be a challenge to convert a significant amount of qualified money during a parent’s lifetime. In some cases, the taxes cannot be avoided. Everyone’s situation is different, so it always best to discuss with a qualified financial professional.



Tom Berkholtz, CFP® | Financial Planning Specialist


Does Your Advisor Help You Consider How Your Estate Can Care For Minors?

Estate Planning Attorney, Jill Martin, JD, works with clients on a wide array of matters, including: how to properly leave money to minors.



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Annex Wealth Management provides free workshops, open to the public, on key wealth management topics.

Each week, we provide links to register for upcoming events.