The SECURE Act brought sweeping changes to retirement and inheritance planning—changes many Monterey families may not realize directly affect their estate plans. Whether you have a traditional IRA, expect to inherit one, or have children who will benefit from your retirement savings, the SECURE Act may significantly impact your long-term financial strategy.

AtJohn D. Laughton, A Professional Law Corporation, our estate planning attorneys help clients understand how these changes work and how to adjust their living trusts, IRA planning, and beneficiary designations accordingly.

Below is a complete guide to the three most important impacts of the SECURE Act for Monterey families.

1. The Required Minimum Distribution (RMD) Age Increased From 70½ to 72

This is one of the most positive changes of the SECURE Act.

✔ What changed?

The age at which individuals must begin taking Required Minimum Distributions (RMDs) from tax-deferred retirement accounts increased from 70½ to 72.

✔ Why this matters for Monterey residents

If you have significant tax-deferred savings in an IRA:

• You gain an extra 18 months of tax-deferred growth
• Your nest egg may increase substantially
• You may delay income taxes on required withdrawals
• You can plan distributions more strategically

For many retirees in Monterey—especially those who do not need immediate IRA withdrawals—this change is financially beneficial.

2. Individuals Over 70½ With Earned Income Can Still Contribute to a Traditional IRA

Before the SECURE Act, anyone over 70½ was prohibited from contributing to a traditional IRA. That restriction has been eliminated.

✔ What changed?

If you are over 70½ and still working, you may continue contributing some or all of your earned income to a traditional IRA.

✔ Why this benefits older working adults

• You can continue saving for retirement
• You can lower your taxable income
• You gain additional tax-deferred growth
• Your estate planning options expand

This change helps Monterey residents who delay retirement, work seasonally, or run local businesses past age 70½.

3. The SECURE Act Eliminated “Stretch IRA” Benefits for Most Non-Spouse Beneficiaries

This is the most significant—and often the most concerning—change for estate planning.

✔ What was the Stretch IRA?

Before the SECURE Act, non-spousal beneficiaries (typically adult children) could “stretch” distributions over their entire life expectancy, reducing their tax burden and preserving inherited wealth.

For example:
A 45-year-old inheriting an IRA could take smaller annual withdrawals over 35–40+ years.

✔ What changed?

Most non-spousal beneficiaries must now withdraw 100% of the inherited IRA within 10 years.

✔ Who does this impact most?

• Families with large IRAs
• Beneficiaries in high earning years (ages 40–65)
• Adult children who risk entering a higher tax bracket
• Heirs who prefer long-term tax and inheritance planning

Smaller IRAs are often depleted within 10 years anyway, so the impact is most pronounced with larger accounts.

✔ Why this matters for Monterey families

Receiving a large IRA all at once can dramatically increase a beneficiary’s taxable income—ultimately reducing the inheritance they receive.

Families may need to adjust:

• Living trust language
• IRA beneficiary designations
• Tax planning strategies
• Long-term distribution planning

Do You Need to Update Your Estate Plan?

If your estate plan includes retirement accounts, or if your heirs will inherit IRAs, you may need to update your trust or beneficiary designations.

You should consider revisiting your estate plan if:

• You created your trust before 2020
• You named children or non-spouse beneficiaries for large IRA balances
• Your beneficiaries are in their peak earning years
• You want to minimize taxes on inherited IRAs
• You prefer controlled or strategic distribution timelines

Our attorneys can help you structure your estate plan to reduce tax burdens and protect your heirs.

How We Help Monterey Families Navigate SECURE Act Changes

At John D. Laughton, A Professional Law Corporation, we offer:

• Comprehensive estate plan reviews
• Trust updates and amendments
• IRA and retirement planning guidance
• Legacy and tax-minimization strategies
• SECURE Act compliance reviews
• Integrated planning for blended families
• Specialized guidance for large IRA and retirement accounts

We will help ensure your estate plan reflects these new laws and protects your family’s financial future.

Secure Your Legacy With Confidence

If you’re concerned about how the SECURE Act impacts your heirs—or if you simply want to ensure your estate plan remains up-to-date—now is the time to review your documents.