What’s Working

1. Later Required Minimum Distributions (RMDs).
   For years, retirees had to begin taking money out of their IRAs and other retirement accounts at age 70½, then 72. Secure 2.0 raised the starting age to 73, with another bump to 75 scheduled in 2033. This gives many retirees extra time to let their accounts grow tax-deferred and more flexibility in planning withdrawals.
2. Bigger Catch-Up Contributions.
   Older workers can now put more into retirement plans. For 2025 and beyond, individuals ages 60–63 will be able to contribute even more in catch-up amounts to their employer plans. This is especially helpful for people who may have had gaps in saving earlier in life, and are trying to catch-up now.
3. Employer Matching on Student Loan Payments.
   A subtle but welcome change: if you’re paying down student loans instead of contributing to your workplace plan, your employer can now match your loan payments as if you had made a retirement contribution. This helps younger savers get started on long-term investing sooner.

What’s Not Working (Yet)

1. Complexity in Beneficiary Rules.
   This is arguably the rule that affects the most people. The original SECURE Act (2019) eliminated the “lifetime stretch” for most non-spouse beneficiaries of inherited IRAs, replacing it with a 10-year payout rule. Secure 2.0 didn’t really fix the confusion about how those rules apply. The IRS has issued proposed regulations, but guidance has changed several times, and many families remain unsure about required annual withdrawals during the 10-year period. There is also a lot of confusion about how certain trusts are treated when they are named beneficiary of a retirement plan.
2. Roth Catch-Up Contribution Hiccups.
   The law requires higher-income employees to make their catch-up contributions to Roth accounts rather than pre-tax accounts. But implementing this has proved tricky for many employers and plan administrators, leading to delays and extra paperwork.
3. Missed Opportunities for Coordination.
   Secure 2.0 created new planning options, but many people haven’t revisited their broader estate plans to take advantage of them. For example, raising the RMD age affects when retirees should consider Roth conversions, charitable giving from IRAs, or the timing of distributions that could support their heirs or favorite causes. It may also affect Medicaid planning in certain states, depending on whether the state exempts or counts retirement plans when determining Medicaid eligibility.

Practical Takeaways

• Review Your Beneficiary Designations. Make sure the right people (or trusts) are named, especially if your plan was built on old stretch IRA rules.
• Revisit Your Withdrawal Strategy. The later RMD age may open a window for strategic Roth conversions or charitable gifts that reduce future tax burdens or accelerate Medicaid eligibility.
• Coordinate with Your Estate Plan. Inherited retirement accounts now behave differently than they did a few years ago. Trusts used as beneficiaries may need to be reviewed to ensure they still work as intended.
• Ask About Employer Changes. If you’re still working, confirm how your workplace plan is handling Roth contributions and student loan matching.

Secure 2.0 has delivered some genuine benefits, particularly for people approaching retirement and for younger workers burdened by student loans. But it has also added layers of complexity to an already challenging area of planning. As we enter 2026 with more IRS guidance on the horizon, it’s worth setting aside time to make sure your retirement accounts, tax strategies, and estate plan are all working in harmony.

If you haven’t reviewed your retirement and estate plan recently, or if you inherited an IRA in the last few years, now is an excellent time to review with an estate planning professional. A little attention today can help avoid headaches (and unnecessary taxes) down the road.

The post Secure Act 2.0: What’s Working and What’s Not appeared first on Desert Law Group | Kimberly T. Lee.

It is always best to consult with your financial advisor, and maybe even your estate planning attorney when considering a reverse mortgage. They can more definitively help you determine whether a reverse mortgage is right for you, and elaborate on the pros and cons. 

What is a Reverse Mortgage?

A reverse mortgage is essentially a loan for older homeowners who are in need of additional cash. It allows homeowners to borrow against the value of their home, turning their equity into cash. This is useful when someone is “house-rich, money-poor” as they say. If someone needs more liquid assets, they often seek a reverse mortgage to get some cash out of the equity they’ve paid into their home.

The homeowner can continue living in their home as long as they pay property taxes, insurance, and generally maintain the home. Homeowners can receive cash in a lump sum, or as monthly payments, or as a line of credit. They do not have to make monthly payments (like with a traditional mortgage), but instead the loan will be repaid when the homeowner finally sells the house, moves out or passes away.

Who Can Get a Reverse Mortgage?

There are a couple of requirements to secure a reverse mortgage, if you do determine that it is a good option for you.

• You must be age 62 or older. If your spouse is under age 62, you can still get the mortgage, but your spouse will be considered a non-borrower, whose name would not be attached to the reverse mortgage.
• You must have sufficient equity in the property – at least 50% of the property’s value 
• The mortgage must be on your primary residence
• You must attend a required counseling session with someone approved by the U.S. Department of Housing and Urban Development (HUD), to ensure you understand how a reverse mortgage works and what you’re signing up for.

When Might it be a Good Option?

If your retirement savings or retirement income are insufficient to cover living expenses, a reverse mortgage can provide or make up for this missing cash flow. As people age, they generally face increased healthcare needs, leading to higher medical expenses. Long-term care is particularly costly, and even routine medical care can quickly become expensive.

Some older Americans want to improve their property in their older age, to make it easier to get around, or even just for resale value. A reverse mortgage may serve as a loan to help fund these improvements. Still another reason could be emergency expenses like large medical bills, a new vehicle, or other unanticipated event. 

A reverse mortgage can be a valuable financial tool for older adults facing rising living costs, where retirement savings are insufficient. By converting home equity into cash, it offers flexibility to address various needs, from healthcare expenses to home improvements. Consult with a financial advisor and/or your estate planning attorney to ensure it aligns with your financial and estate planning goals.

The post How to Cash in on Your Home (Without Moving Out)! appeared first on Desert Law Group | Kimberly T. Lee.

Co-Housing or Shared Housing: Co-housing and shared housing offer seniors a unique blend of private and communal living. In co-housing, individuals maintain their own private residences but share common spaces like kitchens, gardens, and social areas within a community setting. Shared housing involves multiple seniors living together in a single home, where they share responsibilities, costs, and daily activities. 

Both options foster a strong sense of community and can reduce living expenses, but they also require clear agreements on shared responsibilities and financial arrangements.

Recent social media posts also describe “Boom-mates”, where two (or more) members of the Baby Boomer generation rent together, to cut down on costs and help reduce loneliness and social isolation as they age.

Eco-Villages: Eco-villages are sustainable communities designed with a focus on the environment and green living. These communities often feature energy-efficient homes, communal gardens, and eco-friendly infrastructure. For seniors, eco-villages offer a lifestyle that emphasizes healthy living and environmental consciousness, creating a nurturing environment that supports both physical well-being and social interaction. The shared commitment to sustainability can enhance the sense of community and purpose among residents.

Living with Family: While this is not a new approach, it is becoming more prevalent. The idea of older family members moving in with children – or even grandchildren – promotes mutual support and interaction across generations, fostering a rich social environment where seniors can benefit from the energy and companionship of younger members of the family. In turn, younger residents gain valuable life experience and support from older community members, as well as the occasional babysitter. This arrangement can help combat social isolation and create a vibrant, diverse living environment.

Themed Retirement Communities: Themed retirement communities cater to specific interests or lifestyles, such as golf, arts, or cultural themes. These communities offer tailored amenities and activities that align with residents’ passions and hobbies, creating an engaging and fulfilling living environment. For seniors, themed communities provide opportunities to connect with like-minded individuals and participate in activities that enhance their quality of life. 

In conclusion, innovative housing solutions for seniors offer exciting alternatives to traditional living arrangements, although not without their legal considerations. Make sure to discuss your living arrangement carefully with your professionals, to ensure no one ends up with unintended tax or other legal consequences. Unique housing options generally serve to promote well-being for seniors, keeping them home (wherever that may be) a bit longer.

The post Creative Living Arrangements in Retirement appeared first on Desert Law Group | Kimberly T. Lee.

One of the first legal hurdles to address is the residency requirement of the chosen country. Different nations have varying rules regarding long-term stays, often necessitating specific visas or residency permits. Retirees should research the criteria thoroughly, including the financial thresholds they must meet, such as proof of income or savings, to qualify for residency. Additionally, it’s essential to understand the process and timeline for renewing these permits to avoid any legal complications or disruptions to their stay.

If you plan on splitting your time, perhaps staying a few months in another country, you could expect similar hurdles. However, splitting your time in the United States and elsewhere may be an alternative.

Taxation is another critical area where retirees must tread carefully. Retiring abroad does not eliminate one’s tax obligations – rather, retirees may be required to pay tax both in their home country and the new country of residence. Double taxation treaties exist between some countries, which can mitigate the financial burden by preventing retirees from being taxed on the same income twice. However, understanding these treaties requires detailed attention to ensure compliance with both tax systems. Consulting with a tax professional who specializes in international tax law can provide clarity and help retirees optimize their tax situation.

Healthcare is another concern for retirees, and understanding the legal aspects of healthcare access in a foreign country is vital – especially in your golden years. Many countries offer national healthcare systems, but the eligibility for non-native residents can vary widely. Some countries may require retirees to purchase private health insurance or participate in the national healthcare system by paying into it. Evaluating the quality and availability of healthcare services, along with the associated legal requirements, ensures that retirees can access necessary medical care without unexpected legal or financial hurdles. Planning ahead and securing the appropriate coverage will provide peace of mind and stability in their new home.

Estate Planning also requires some attention prior to moving abroad. It is important to discuss one’s post-death goals with a dedicated estate planning attorney. They can weigh in on the tax implications and other complications that may come along with the distribution of a retiree’s assets after their passing.

Navigating the legalities of cross-border retirement requires meticulous planning and a proactive approach to understanding the intricacies of foreign legal systems. By addressing residency requirements, taxation, and healthcare, retirees can avoid potential pitfalls and fully enjoy their new life abroad. Engaging with legal and financial experts who specialize in international retirement can provide invaluable guidance and support, ensuring a seamless and legally sound transition to a fulfilling retirement overseas.

The post Considering the Legalities of Retirement Abroad appeared first on Desert Law Group | Kimberly T. Lee.

A story in Forbes points out that who gets the money invested in a retirement account such as an IRA depends on who is named on the account’s beneficiary form.

Lots of people make mistakes when it comes to retirement accounts.

They may fail to designate a beneficiary, or the form may not be on file with the financial institution that has custody of the account.

Either mistake can cause problems when it comes to distributing the money. For example, the money could go to the person’s estate and be subject to creditors or to someone you don’t want to see get the money.

If you name your estate as the beneficiary, the IRA asset will be subject to probate and cause immediate income tax consequences. Here are some basic IRA rules to live by:

• Designate a beneficiary.

• Designate a contingent beneficiary.

• Don’t designate your estate.

• Don’t designate your living trust, unless otherwise directed by your attorney.

• Review the beneficiary forms regularly.

• Make sure your financial institution has the form and any updated forms.

The post Take Care With IRA Beneficiary Forms appeared first on Desert Law Group | Kimberly T. Lee.

New York City Pride March 2013: Edith Windsor (Photo credit: FreeVerse Photography)

As explained in this recent article, one of the biggest estate benefits to come from the recognition of same-sex couples is the ability to transfer as much assets as they wish to each other, either during life or death, without having to pay any federal estate or gift tax. Prior to this 5-4 ruling from the Supreme Court, this tax benefit was unavailable for same-sex couples because section 3 of DOMA defined marriage as a “legal union between one man and one woman,” and spouse as “a person of the opposite sex who is a husband or a wife.” However, with the repeal of DOMA, same-sex married couples may finally be treated with equality and invoke this tax benefit as well as many others.

Another estate tax benefit that is now available to same-sex married couples is that of portability which was part of the 2010 tax law changes. This concept allows the surviving spouse to use the unused estate tax exclusion, which is currently $5.25 million, upon the passing of the spouse as their own. To utilize this benefit, the executor handling the estate of the deceased spouse need to elect on the estate tax return to “port” the unused exclusion to the surviving spouse, who may then use the remaining credits.

Another important estate planning benefit now available to same-sex couples is gift-splitting. Currently, individuals are allowed to give away $14,000 a year to as many people as they want without reporting the gift or paying a gift tax. There are three ways married couples can “gift split”: (1) each spouse may give $14,000; (2) the spouses may collectively give $28,000 from a joint account; or (3) a single spouse may combine the gift exemption and give $28,000 from his or her own account.

This new ruling also impacts company retirement plans, rollover rights for retirement accounts and other IRA accounts.  Same-sex married couples have access to the Employee Retirement Income Security Act of 1974, which gives your spouse the right to be the sole primary beneficiary to qualified retirement plans. Also, special rights are created for all retirement plans including IRAs that allow the spouse to rollover the account and defer taking withdrawals until the surviving spouse reaches the age of 70½, rather than immediately taking withdrawals by December 31^st of the same year.

Whenever a new law is enacted, it’s important to seek advice from an experienced estate planning attorney who stays on top of these changes to update your estate plan is up to date and correctly reflects both your intent as well as the changes in the law.

The post DOMA is Unconstitutional, Now What? appeared first on Desert Law Group | Kimberly T. Lee.

According to the article, “most people don’t realize
Medicare covers much less than traditional employer plans.” One recent report
reveals that “For a 65-year-old couple retiring this year, the cost of health
care in retirement will be $240,000, 6 percent more than that same couple
retiring in 2011 would pay.” This can end up being a significant portion of
your annual budget, and if you haven’t planned for it correctly it can be the
difference between a comfortable retirement and scraping to get by.
Furthermore, one of the primary oversights of retirement planning is accurate
knowledge of Medicare. Most individuals in the planning stages “routinely and
wildly overestimated the percentage of health care costs covered by Medicare.”

Even when health care costs are accurately taken into
account, individuals often neglect to consider that they may be living in a
different state with different health care costs than what they’re used to. “Moving
to cheaper and possibly warmer climates is something many retirees naturally
do. But while someone may be willing to move to Florida to reduce state taxes
and avoid the ice and snow of the north, most people have so little awareness
about the costs of health care in retirement that those costs are probably not
a driving factor.”

Planning for retirement—and trying to anticipate all the
cost and expense that may come with it—can be made much easier if you have a
knowledgeable advisor to guide you through the process. Your elder law
attorney, estate planning attorney, financial advisor and insurance agent are
just a few of the experts who can help ensure that your future will be
comfortable and secure.

The post Are Health Care Costs A Part of Your Retirement Plan? appeared first on Desert Law Group | Kimberly T. Lee.

All of this is about to change, however, thanks to new laws being enacted by thehttps://www.huffpost.com Department of Labor. CNN Money reports that “A new federal rule took effect July 1 that requires 401(k) plan providers to disclose certain 401(k) fees, and employers to distribute these disclosures to plan participants by Aug. 30.” The hope with this new disclosure rule is that it will increase transparency, and help both employees and employers stay aware of how much their “free” 401(k) may or may not be costing them in administrative fees.

We live in a culture of constant demands and distractions, and it is all too easy to fill out the paperwork to set up a 401(k) with an employer and then forget about it, assuming that as long as nothing changes, everything will keep working the way it’s supposed too. Things do change, however, both in the world of investment and in our own lives. All too often we see clients who miscalculate their 401(k) growth in relation to their retirement needs, or whose valuable retirement savings is lost to taxes when the owner passes away unexpectedly. In all cases, it is important not only to be aware of what’s happening to your savings, but also to be proactive about protecting it, and this is where our office can help.

Whether you are already retired or just getting started with your savings, our firm can help you evaluate your assets, plan for their growth and upkeep, and ensure that they end up in the right hands if something should happen to you. The temptation to procrastinate or bury your head in the sand can be strong, but the knowledge of the consequences of inaction can be stronger. Contact our office and let us help you protect your retirement savings for yourself and your loved ones.

The post Do You Know How Much Your 401(k) Is REALLY Costing You? appeared first on Desert Law Group | Kimberly T. Lee.

Planning for retirement can often feel overwhelming to anybody without a background in economics or investing, but the use of the well-known and easily remembered religious/literary reference makes planning for your retirement a little more relatable. For example, the concept of diversifying your portfolio becomes easier to understand when related to the sin of greed:

“Greed is a killer when it comes to your investment portfolio. Greedy investors often chase past results, choose higher risk investments, or don’t do their research before investing. This can lead to falling for scams, buying at the top of the investment bubble, and other problems. Solution: Start with a balanced portfolio, research all investments thoroughly before buying, and remember that if an investment sounds too good to be true, it probably is.”

And of course who could ever forget the ever-popular sin of lust: “Lust can be equated to extravagance and longing to the point it becomes all-consuming. Signs of giving in to lust include spending too much on luxury items and living beyond your means. It could also mean having champagne taste on a beer budget. Excessive spending can lead to unmanageable debt if left unchecked. Solution: You need a budget and you need to stick to it.”

The article tackles sloth, pride, envy, wrath and gluttony in the same helpful and informative manner, reminding us that although retirement planning today—with our Roth IRAs, 401(k)s and online investment portfolios—may at times be complex, convoluted and fast moving, the principles behind it are well known and ages old.

The post Retirement Planning Goes Back to its Roots appeared first on Desert Law Group | Kimberly T. Lee.

The differences may not be as surprising as you think. Here are some of the things CNBC had to say about how men and women invest and save:

• Men tend to be overconfident about their investing and retirement planning skills.
• Women generally prefer less risky investments.
• Men don’t plan for a long retirement.
• Women save more over time.

Considering the fact that our society still tends to view the stock market as “a man’s game”, and one with which women aren’t quite as comfortable, it makes sense that a man would be more confident with frequent buying and selling, while a woman might tend to go for the safer investment requiring less action and attention over the long haul. But lack of attention doesn’t necessarily mean lack of awareness. Women tend to worry more than men about security in their Golden Years. The article posits that this is because many men don’t expect to live much past 80, but another possibility is that men have more confidence in their ability to earn a living at any time in their lives; whereas women (who are often the ones to leave the job market in order to care for children or aging parents) are more afraid of having to depend on an outside source for their livelihood.

Part of planning for your retirement is planning for your estate. Whether you are a man or a woman, adventurous or conservative, a trader or a saver—it is important that your retirement plan and your estate plan need to be in line with each other. We can help ensure that your retirement and estate plans are compatible… both right now and decades down the line.

The post Trade Like A Man, Save Like A Woman appeared first on Desert Law Group | Kimberly T. Lee.