On December 20, 2019, the President signed into law the Setting Every Community Up for Retirement Enhancement (SECURE) Act.  The SECURE Act was passed by significant bi-partisan majorities in both the House and the Senate, and it includes some of the most significant changes to retirement plans in several years.

Elimination of the “Stretch IRA”
Although there is no such thing as a “stretch IRA”, this term is often used to describe the fact that the recipient of an inherited IRA could stretch out their distributions over their lifetime, thereby potentially allowing many years of tax deferred growth. For example, if a 28 year old grandson received an inherited IRA from his deceased grandmother, he could have potentially “stretched” out distributions from the IRA until he was into his eighties. 

Under the SECURE Act, that has all changed.  Now, that grandson must take the IRA distributions out over ten years.  There are some exceptions for some beneficiaries, including:  spouses, the disabled or chronically ill, individuals who are not more than ten years younger than the deceased IRA owner, and minor children.  The exception for minor children expires when they become legal adults.  At that point, the child must take the distributions out over the next ten years.  The beginning of that ten year period, however, can be delayed up to the age of 26, if the child is still in school.

In addition to the exemption for certain beneficiaries, the application of the new ten year rule on distributions will not apply to governmental plans, such as 403(b) and 457 plans, until January 1, 2022.

Change of the time period when RMDs start
Under the prior law, if you had an IRA, you needed to start taking out required minimum distributions (RMDs) in the year you turned 70 ½.  Under the new law, you can delay taking RMDs until you are 72.  If you do not need the income at 70 ½, this allows you to keep the IRA growing tax free until you reach 72.

IRA contributions no longer prohibited after age 70 ½
Under the prior law, if you were still working at age 70 ½ and earning compensation, you could no longer contribute to a traditional IRA after you reached 70 ½.  Under the new law, this prohibition is lifted and you can continue to contribute to your IRA.

New qualified birth or adoption expense exception
Generally speaking, if you take a distribution from your IRA before you are 59 ½, you will be subject to a 10% early withdrawal penalty.  Under the new law, you may take a penalty-free distribution of up to $5,000 after you have a child or adopt a child.  This distribution applies individually, so if both parents have an IRA, they could withdraw penalty-free up to $10,000.  In addition, you may restore those funds later back into your IRA without regard to annual contribution limits.

Important changes for employers
The SECURE Act includes several new provisions to encourage employers to set up retirement plans for their employees.  Employers may now take advantage of “safe harbor” provisions, which will encourage the use of annuities in retirement plans.  If the employer abides by these provisions, they will be insulated from legal liability if the insurance company providing the annuity to the employee later becomes unable to meet its obligations to the employee.

These safe harbor provisions are meant to encourage a greater use of annuities in retirement planning.  While everyone’s retirement plans and goals are different, the advantage of annuities is that they provide a set amount of monthly income in retirement, akin to a pension payment.  As a result, the chance of the employee running out of money in retirement is potentially reduced.

The SECURE Act also provides increased tax credits for small businesses that establish retirement plans, as well as new or increased tax credits for those that auto enroll their employees in retirement plans.  Another welcome change is greater access to retirement plans for part-time employees.

Under the prior law, employers could exclude part-time employees from participating in a 401(k) plan if they worked less than 1,000 hours in a year.  Now, if the employee works at least 500 hours in a year for at least three consecutive years, they will be able to participate.  This provision starts in 2021, so the first eligible employees will be able to participate in an employer provided 401(k) plan in 2024.

Additional changes not related to retirement plans
The SECURE Act also includes several changes to the law not related to retirement plans.  Included in those changes are new modifications regarding 529 plans.  Under the new law, 529 plan funds can now be used to pay off qualified student loan debt up to $10,000.  This limit is a per-person lifetime limit, but the law allows additional similar payments of up to $10,000 each for the siblings of the 529 beneficiary.

As with all significant changes in the law, the SECURE Act presents challenges and opportunities.  In order to successfully navigate the new retirement landscape, it is advisable to consult with an experienced professional, such as an estate planning attorney, accountant, or financial advisor.

Matthew J. Dorsey, Esq. is a Partner with O’Connell and Aronowitz, 1 Court St., Saratoga Springs.  Over his twenty-three years of practice, he has focused in the areas of elder law, estate planning, and estate administration. Mr. Dorsey can be reached at 518-584-5205, mdorsey@oalaw.com and www.oalaw.com. 

In today’s confusing and complex health care environment, it is important for every one of us to make our goals and wishes for our care expressed and understood.  Where appropriate, this should be done in a manner that ensures those wishes will be respected.  This applies to people of all ages and all states of health.  None of us knows when we might become incapacitated due to an accident or sudden illness. 

Why do I need a Health Care Proxy?
New York State provides the Health Care Proxy, a document that allows you to appoint a Proxy decision-maker should you loose decision-making capacity.  Proxy forms are available at most physician offices, and on-line.  The form allows you to designate another adult as your Proxy, as well as to name an Alternate.  A critical factor in designating your Proxy is his or her understanding of what in fact you would want.  Be sure to discuss your underlying values and health care wishes and preferences.  The Holiday Season is a great time for these conversations among family and close friends.  Legal and medical advice is helpful in completing the form, but not required.  Carefully choose your proxy, complete the form, have it witnessed, and make sure your health care providers, including the Hospital, have it in their records.  Most States recognize and honor the New York document. Since the status of and access to your Proxy may change due to moving, sickness, disability, new phone service, or death, it is advisable to update your Health Care Proxy every year.

When Serious Illness Advances, Do My Preferences Matter?
If you have a very advanced serious illness, perhaps with only a year or two to live, New York State provides an actual medical order called the MOLST – Medical Order for Life-Sustaining Treatment.  This form allows your physician to order care that is aligned with your wishes should your heart stop.  The order covers resuscitation wishes for when you have stopped breathing, as well as other care guidelines and instructions.  Both you and your physician sign the MOLST.  Signing a MOLST is not a snap activity.  It is the culmination of thoughtful conversations about What Matters Most to you as your illness becomes terminal, and what your Goals of Care and Treatment Preferences are.  It will most certainly guide your end-of-life care when that time comes. While the Health Care Proxy is an advance directive, the MOLST is an actual medical order.  MOLST’s are available in most medical offices.

When Should I Receive “Palliative Care?”
When facing serious illness, it is also important to remember palliative care and Hospice.  Palliative care is a type of medical care while Hospice is a formalized healthcare program fully covered by most insurances.  Palliative care is patient-centered care that focuses on quality of life and care of the whole person: physical, social, emotional, and spiritual.  The World Health Organization advises that palliative care should begin at the point of diagnosis of a serious illness, and be incorporated with all other care.  That means that palliative care becomes an extra layer of care and support, even while you are undergoing cure-oriented or disease-modifying treatments.  So don’t think that palliative care means Hospice – it doesn’t.

The application of palliative care before Hospice is one of the greatest needs today as progressive chronic illnesses are becoming epidemic and home care supports for seriously ill persons are increasingly inadequate.  Palliative care has trained and certified specialists right here in Saratoga County, and it is also delivered by any physician in what is called “primary” or “generalist” palliative care.  Congress last month passed legislation enabling more training in palliative care for medical students across the county.

When Should I Choose Hospice?
Hospice is a program of care at the end-of-life, appropriate when cure-oriented and disease-modifying treatments are no longer effective.  It is available when your life expectancy is 6 months or less if the disease runs its normal course.  So up-front discussions and planning with your doctor is critical.  Actually, records show that many patients elect Hospice very close to the actual day of death.  Hospice family members frequently say they wish they had brought Hospice in sooner.  Dying is a normal part of living (none of us will get out of here alive!), and Hospice neither hastens nor postpones the dying process. 

Surveys show that the vast majority of Americans want to be cared for at home, and when the time comes, to die at home.  But the majority of Americans still do not do so.  Many find themselves in circumstances they swore they would avoid.  So take the steps today to ensure that your wishes are known and respected:  Have a current Health Care Proxy document on file with all your providers; speak with your doctor about a MOLST if your illness is very advanced; add Palliative Care to your treatment plan for a serious illness; and consider Hospice with your doctor as your life expectancy becomes short term.

Phil Di Sorbo is a hospice and palliative care consultant on 233 Lake Avenue in Saratoga Springs.  He served as Executive Director of Community Hospice for 26 years, including the founding of Hospice of Saratoga in 1987.  He worked in hospice and palliative care capacities statewide, nationally, and in Africa.  He is currently active in expanding palliative care into mainstream healthcare earlier than end-of-life, working with area health systems.  He offers a navigation counseling service for seriously ill persons and their families, and can be reached at 518-755-1806 and pdisorbo@fairpoint.net.

At the end of last year Congress passed the SECURE Act. As is often the case with Congress, the acronym belies the content of the Act, in many respects, as it contains some provisions that are not altogether helpful to many individuals. Let’s review some of the major provisions (good and bad) of the Act.

Stretch IRAs: 
For IRAs inherited prior to Jan 1, 2020, non-spouse non-trust beneficiaries, need to take a Required Minimum Distribution (RMD) from inherited IRAs each year based on their life expectancy, for the remainder of their life. The younger a beneficiary, the smaller the distribution, as a percentage of the balance. This meant that most of the IRA balance could remain tax-deferred until the beneficiary needed it.

The new rule requires that IRAs inherited on or after Jan 1, 2020 (with few exceptions) must be completely withdrawn within only ten years. This provision will require most beneficiaries to empty inherited IRAs, which are fully taxable, during some of their highest earning years. The net effect will be a tax increase on these individuals by forcing beneficiaries to recognize more income and by forcing many into a higher tax bracket.

Beneficiary IRAs that predate the new Act taking effect are grandfathered in under the old rules. 

Required Minimum Distributions (RMDs):
Under the previous law, an individual must begin taking distributions from their own IRA by the end of the year in which they turned 70.5. The new law pushes that date out to their 72nd year.  However, anyone who attained age 70.5 before Jan 1, 2020 is still subject to the old rule, and must continue taking RMDs. Anyone turning 70.5 on or after Jan 1, 2020 can now wait until age 72. Unlike Inherited IRAs, your own IRA RMD is still based on a lifetime schedule.

IRA Contributions:
The new Act updates IRA contribution rules to bring them in-line with other retirement accounts. Beginning tax year 2020, you can now make IRA contributions beyond the age of 70.5, as long as you have earned income equal to or greater than the contribution amount. You cannot, however, make a prior year contribution for tax year 2019 under this rule. 

Withdrawals:
The Act allows for penalty-free withdrawals from IRAs of up to $5,000 in the event of a birth or adoption. 

The greatest impact of the Act will be to force withdrawals from Inherited IRAs over an accelerated period and during a time in which many beneficiaries will already be subject to higher taxes due to being in their highest earning years. That being said, you can still employ strategies to help mitigate taxes during this period. One option may be to increase contributions to your employer-sponsored plans (401k, 403b, etc), which could help offset the taxable income you’d be forced to receive from the IRA.

Again, these changes are beginning tax year 2020 (on or after Jan 1, 2020), and Inherited IRAs and other IRA RMDs schedules which predate, are unaffected. 

As always, work closely with your independent financial advisor to better understand how the Act may affect your individual circumstances, and to devise a strategy to manage the tax burden where possible. 

Stephen Kyne, CFP is a Partner at Sterling Manor Financial, LLC in Saratoga Springs, and Rhinebeck.
Securities offered through Cadaret, Grant & Co., Inc. Member FINRA/SIPC. Advisory services offered through Sterling Manor Financial, LLC, or Cadaret Grant & Co., Inc., SEC registered investment advisors. Sterling Manor Financial and Cadaret Grant are separate entities.

THE FIRST WEEK OF THE NEW YEAR following time off from work, traveling, celebrating the holidays and being out of your routine can feel overwhelming and exhausting. It is not uncommon to experience an emotional and physical hangover from spending more time with extended family and indulging in foods and beverages that are not a part of our regular routine.

It’s easy to shame yourself post holiday season and create a plan to get back into shape, organize your house and eat a healthier diet. While these intentions are good, we set ourselves up for shame and failure when we dive into January headfirst. 

The best way to get back into a healthy routine is slowly and steadily.  The roadmap back to feeling rested, energized, healthy and in control is to focus on the simple day-to-day tasks of organizing our days in a way that promote peace of mind emotionally, physically and spiritually.

Whenever I feel out of control and out of sorts because I’m out of my routine I always resort to the same three action steps to establish an immediate sense of order.  First order of business it to clean out my fridge and throw out all leftover food, expired condiments and anything that looks like it has overstayed its welcome.  I take everything out and wipe down all the shelves and put everything back organized by food groups and size.  The finished product is a clean, sparkly visual that helps me feel like my life is in order.

Call me crazy, but I definitely make better food choices when my fridge is clean and organized.   The tidy visual of the stain free shelves and every item in its place makes me less likely to just grab something that may make me feel tired in the long run.

Next step is to do the same in the pantry.  Every item has its place to be and if the olive oil is next to the goldfish I move it and organize all items by category.   The finished product is an organized pantry that makes me feel like I am a responsible adult who can handle day-to-day life.

Last one, I change the sheets.  I put on my favorite sheets, fluff the pillows and line them up in a way that brings me joy.  There is nothing better than climbing into a bed with fresh sheets when you feel like your life is chaos. 

I would love to take credit for these simple but powerful ways to establish an immediate sense of accomplishment, but I have to give the credit to my mother.  These were the three things she did faithfully after holidays, big trips, a house full of visitors or a bad day.  As a teenager I would roll my eyes as every countertop had the contents of the fridge on it and she wiped down the shelves, now I laugh because it turns out these life hacks she came up were sheer genius.  Thanks Mom!

Before you cut carbs, join a gym, sign up for a class, quit your job or make a major life change, try these three little action steps to give you an immediate sense of clarity, peace of mind, a sense of accomplishment and joy! 

YOU ARE WORTH IT!

Meghan Fritz is a psychotherapist practicing in State College, PA.  For more information go to changeyourstoryllc.com.

I really enjoy making holiday meals for my immediate and extended family, and this year was no exception. My husband loves to cook as well, and together we planned a Christmas dinner menu that was perfect, with the main attraction being a roast beef tenderloin with caramelized onion and mushroom stuffing and an herb butter brushed over it at the end. (Thank you to my dad for providing the beef! It was a gorgeous piece of meat.) 

I’d calculated when the roast needed to go in the oven, in order for it to have enough time to cook and then enough time to rest before our scheduled dinnertime, and fifteen minutes before that I turned the oven on to preheat it.

Except, it wouldn’t start.

My husband and I tried about fifty-seven times over the next hour to get the oven to start before we had to admit defeat. Thankfully, it was not nearly as bad as it could have been and dinner wasn’t ruined, since I was able to use the oven at my parents’ house, so we were able to have our roast (albeit a bit later than planned) despite the non-working oven. It was just such a bummer to have our oven decide to poop out on Christmas Day. 

Except, it turns out it didn’t poop out. Rather, it seems that someone’s too-rough handling of the drawer beneath the oven over the past few years had a hand in wedging a baking sheet up against the igniter wire over and over — which accounts for why we’ve long thought the oven was a “finicky starter” (though we’d always been able to get it to start after a few tries). Yes, that “someone” would be me. In fact, on Christmas morning itself I’d pulled the drawer out and couldn’t get it to go back in quite right and my solution was to keep trying to ram it in there as hard as I could. I kicked it a few times. I yelled in frustration. And then the oven wouldn’t start later, just when we needed it to be on top of its game for Christmas dinner for us and our guests.

It’s sort of funny this happened when it did, because we discovered my role in the non-working oven just days after I’d gotten angry at the boys for being too rough with their things. Specifically, their clothes. Specifically, their brand new clothes.

Brand new clothes are pretty rare in our house, especially for the younger boys. We’ve been the fortunate and grateful recipients of many many hand-me-downs from family and friends since my oldest was born, which has been such a gift. Because of them, I haven’t had to buy too many new things for the boys over the years, but every once in a while we run into a situation where nothing fits anyone, or I can’t find that bag I stored away that has those particular things we need, or what we have in the necessary size has too many holes from being worn out by the big brothers.

This winter has been one of those times — we were short on pants of all kinds! Some boys didn’t have jeans, some didn’t have sweatpants (or athletic pants, or whatever they’re calling them these days … I usually just call them “comfy pants”), some didn’t have church pants, one has been wearing too-small snow pants all winter. I haven’t been overly worried, since I was confident Santa would come through — and he did! Each of the boys received the pants they needed on Christmas morning, and they all got socks as well (another of those things that we always need and seemingly can never find) — this mama could not have been happier. In fact, I told the boys that those gifts were really for me! (They weren’t amused.)

But guess what? Within three days of Christmas, two of the boys had put holes in the knees of their pants. Their brand new pants. This mama was furious. This mama was not amused.

I might have said things like, “Are you kidding me?” and “What were you thinking?” and “Why would you do that?” “Boys!” I growled to myself. “They’re so rough with everything!” I lamented.

And then, just a few days later: Mom’s Roughness Discovered to Be Cause of Broken Oven.

Fortunately, the oven was an easy fix, and I can easily mend the boys’ pants (those particular pants were meant mostly for lounging around the house anyway), so there was no real disaster with either situation. Just a reminder — a resolution — to be more patient with children and appliances. So, 2020’s off to a good start, I guess! I hope this new year is full of joy and blessings for all of you!

(Thanks to Jim Parisi of Parisi Appliance House for the appliances and service he’s provided us for as long as we’ve been homeowners!)

Kate and her husband have seven sons ages 15, 13, 11, 9, 8, 5, and 1. Follow her at www.facebook.com/kmtowne23, or email her at kmtowne23@gmail.com.

After a holiday season full of indulgences, the new year brings an opportunity to start incorporating some healthier habits into your routine. Here are some suggestions for simple resolutions that will help you become a healthier you in the new year. 

1. DRINK MORE WATER
The common recommended intake for water is 8 glasses (8 oz.) per day.  However, the majority of people fail to meet this standard.  Water is an often overlooked essential of health.  Drinking more of it can improve physical and mental performance, aid in digestion and weight loss, and improve overall wellbeing.  Try to up your daily water intake by drinking a glass of water with every meal. 

2. EAT MORE VEGETABLES
One of the most common resolutions that people make is to eat healthier.  But committing to a complete diet overhaul can be overwhelming and unsustainable. Instead, try starting small by including one serving of vegetable with every meal.  Vegetable are not only packed with vitamins, minerals and antioxidants, but they are low in calories and high in fiber.

3. GET MORE SLEEP
According to the CDC, 1 in 3 adults do not get enough sleep.  Sleeping less than 7 hours per night can increase the risks of obesity, hypertension, heart disease, and mood disorders.  To improve your sleep, try going to bed and waking up at the same time every day.  Set an alarm for the evenings to remind you its time to go to bed.  Avoid cellphone and computer screens an hour before bedtime and keep your bedroom at a cooler temperature to improve sleep quality. 

4. EXERCISE MORE
This is another one that people tend to be overambitious with.  If you are not used to working out on a regular basis, jumping right into an intense workout routine can be difficult to stick to.  Instead start by incorporating a little more movement into your daily routine by taking the stairs instead of the elevator, parking at the far end of the parking lot, or taking a short walk around the block during lunch breaks.  It can also help to figure out what your specific goal is for exercising, whether its to lose weight, build strength or improve cardiovascular health, finding workouts that are aligned with these goals and that you enjoy will make it easier.

5. TRY MEDITATION
Meditation can help alleviate stress and anxiety, reduce blood pressure, extend attention span, and improve sleep. Start with just a few minutes a day and pick a time that is easy to incorporate into your daily routine like when you wake up in the morning or during your daily commute. 

6. DRINK LESS ALCOHOL
Chronic heavy drinking can increase the risk of liver and heart disease, mental deterioration, depression, and cancer. Reduce the number of drinks you have by drinking a glass of water after each cocktail.  Or try having a “dry January” and cut out alcohol altogether.  You may be surprised by how much better you feel. 

7. STRETCH DAILY
Stretching can increase your flexibility and range of motion, improve your performance in physical activities, increase circulation and blood flow to your muscles, improve posture, and prevent injuries. Start by stretching for just a few minutes per day.  Set a daily alarm as a reminder or stretch first thing in the morning or right before bed. 

This week ushers out the end of another year, and another decade. We’ve just lived through a decade of economic expansion, and are still in the middle of the longest bull run in history, with no clear end in sight. All of the fear mongering and doom-and-gloom predictions since the recession, a decade ago, have been wrong. The sky has not fallen, and the future still looks promising.

In the last ten years, the S&P index (a frequently quoted index comprised of 500 commonly held US stocks), has increased 190%. Just this year, the index is up about 30%. While a third of this year’s gains were a recovery from the correction at the end of 2018, the markets still continue to reward those with the discipline to stay appropriately invested. Over the same ten years, the NASDAQ was up 295% with a gain of 36% in 2019.

Technology and capitalism are amazingly transformative forces, and when working together, they produce astounding results on a global scale. Consider that 100 years ago, 80% of the world lived in extreme poverty. In the year 2000, 20% did, and that number has since been halved. The last 100 years has seen the rise of America as a global force, spreading and protecting capitalism and democracy around the world, and creating an environment where innovation and entrepreneurship are rewarded.

Technological advances in communications, travel, logistics, heath care, shipping, agriculture, chemistry, energy and in every other part of the economy have freed billions from the shackles of extreme poverty. 

Famine is largely a thing of the past. Global inequality has fallen dramatically as Asia and Africa are experiencing faster economic growth than Europe and North America.

For all the talk about an environment on the brink, technology is solving that problem as well and allowing us to do much more with much less, every day. Consider that the computing power in your smart phone would have cost millions of dollars just twenty years ago, and would never have fit in your pocket. Today one device replaces cameras, camcorders, flashlights, atlases, watches, calendars, CD players, newspapers, a stack of board games, and virtually anything else someone with a little ingenuity can dream of. 

Twenty years ago, the US was the world’s largest energy beggar, and today we are the largest producer of energy in the world, and we owe this to technological advances in fracking. As natural gas continues to replace coal in the production of power in the US, we’ve seen CO2 production plummet since 2005, with per capital levels at their lowest since 1950. This is absolutely astounding when you consider how much the economy has grown over the same time period.

We’re going into an election year, so remember to tune out the noise. Both sides need to convince you that they are the only ones with the answers. Neither is right.  Yes, sometimes bad things happen, but that doesn’t mean the world isn’t getting better.

As we turn to the future, we think technology continues to lead the way, as long as governments allow innovators to do what they do best. 

Unemployment is functionally zero, with rates among African Americans and Latinos at historic lows. There are only two ways to grow your economy when you’ve exhausted your supply of workers; immigration and technology. Since immigration is likely to continue to be a political football, that leaves technological innovation as the primary driver for increasing worker productivity. 

In addition, wage growth continues to outpace inflation, especially for the poorest among us, which means consumers have more real dollars to spend.

In the coming year, we expect more economic growth for the US, and another positive year for the stock markets. We think 10-15% growth in the S&P is likely, although the markets will experience their normal swings. 

US government policies continue to be accommodative to growth in this country, as long as tax cuts remain in-force, regulations remain at their current levels, and interest rates continue to be appropriate. Barring a sweep of both houses of Congress and the White House by the Democrats, we expect this will be the case.

As always our forecast contains forward-looking statements which may be revised at any time. Stay focused on fundamentals in the coming year, and work closely with your financial advisor to help ensure your investments remain appropriate for your needs and market conditions. 

Stephen Kyne, CFP is a Partner at Sterling Manor Financial, LLC in Saratoga Springs, and Rhinebeck.

Securities offered through Cadaret, Grant & Co., Inc. Member FINRA/SIPC. Advisory services offered through Sterling Manor Financial, LLC, or Cadaret Grant & Co., Inc., SEC registered investment advisors. Sterling Manor Financial and Cadaret Grant are separate entities.