The Lange Report – June 2019

Table of Contents

Breaking News Death of the Stretch IRA James Lange CPA Attorney

House Overwhelmingly Passes Bill that Will Devastate IRA and Retirement Plan Owners

This is a big deal for IRA and retirement plan owners.

Though there is no magic number, if you have or will have an IRA or retirement plan of $1,000,000 or more and were hoping to leave your heirs a tax-preferred legacy, you should take this information very seriously. Our office is responding by presenting you with the following resources and options:


  1. A short video explanation found at
  2. Revised workshops incorporating the potential changes, the next two are Saturday, June 29th in Squirrel Hill and again on Saturday, July 20th in the South Hills. See the back of the newsletter for details.
  3. A webinar on Tuesday, June 25th at 1 p.m. Please go to to sign up.
  4. We have already sent updates to those who have signed up for our e-mail newsletter. We will continue to send out e-mail as developments and our responses to the developments continue. If you have not done so yet, please sign up for our e-mail newsletter by going to
  5. Read this newsletter for the breaking news.

On May 23, 2019, in a 417-3 vote, the House of Representatives passed a new tax bill called the SECURE Act which could be more appropriately called the Extreme Death-Tax for IRA and Retirement Plan Owners Act.

The bill is promoted as an “enhancement” for IRA and retirement plan owners because it includes provisions allowing some workers to make higher contributions to their retirement plan. It also eliminates the existing cutoff of age 70 ½ by allowing workers of any age to contribute to Traditional IRAs and extends the required minimum distribution age to 72. The fine print, however, spells massive income-tax acceleration for the families of IRA and retirement plan owners after the death of the IRA owner.

The consequences of this bill will be devastating to people who have worked hard their entire lives, played by the rules, and accumulated significant amounts of money in their IRAs and retirement plans. It will be even more devastating for IRA owners whose IRA and/or retirement plan constitutes the biggest asset in their estate. This proposed massive acceleration of taxes really betrays those conscientious savers who socked money away under the assumption that they would be able to pass that money on to their children in a tax efficient manner.

Under existing law, non-spousal heirs of an IRA owner can “stretch” or extend the taxable distributions of an inherited IRA over their lifetime. The benefit of protracting the distributions of an inherited one-million-dollar IRA could mean as much as a million additional dollars to the heirs of the IRA owner over their lifetime compared to what would happen with the House bill. It’s all about how quickly taxes are or are not collected. Under the Secure Act, the entire IRA or retirement plan would have to be distributed within 10 years of the death of the IRA owner.

The Senate is also proposing changes to the “stretch” rules. In mid-April Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and ranking member Ron Wyden, D-Ore., reintroduced their Retirement Enhancement and Savings Act (RESA). The Senate version proposes a five-year distribution deadline (instead of ten-years) which is even more draconian. This distribution rule is considerably softened by the inclusion of a provision that would exempt the first $400,000 per IRA and retirement plan beneficiary. This exemption, however, would make estate planning extremely complicated for IRA owners who have more than $400,000 in their accounts. Presumably, if the Senate goes on to pass their version, the House and Senate will have to compromise on the details. But, if the resulting compromise includes any of the changes to the distribution rules for inherited IRAs and retirement plans proposed in either of these bills, its passage into law will, to a large extent, spell the end of the “stretch IRA” as we know it.

It is important to note that none of the proposed changes apply to accounts inherited by the surviving spouse; which makes “getting married for the money” much more attractive for older IRA and retirement plan owners who are currently in committed relationships.

The Tax Cuts and Jobs Act of 2017 gave the middle class that consists of roughly 65 million people, a tax cut of $1,370. The top .1% (about 120,000 taxpayers) got an average tax cut of $193,380 (LISI Estate Planning Newsletter#2610). Well, your heirs are going to make up just a small portion of that cut. This threat has been on the horizon for years. Back in 2013 a bill that would have killed the stretch IRA was passed by the House of Representatives and was only narrowly defeated in a 51 to 49 vote by the Senate. Then, in 2016 we saw the reintroduction of similar legislative proposals which enjoyed strong bipartisan support.

So, what can retirement plan owners do to respond to these impending changes? How can they protect the financial legacy they hope to leave for their children and grandchildren?

Of course, no blanket recommendations will cover every IRA and retirement, plan owner. However, action can and should be taken by many taxpayers before the law takes effect. If timed correctly, Roth IRA conversions can be an effective strategic planning tool. Roth IRA conversion planning just got a lot trickier. I will be addressing Roth IRAs and Roth IRA conversions in our 1:00 p.m. workshop, Cut Taxes on Your IRA Withdrawals With the New Trump Tax Laws.

The new law will also bring to the forefront the importance of using optimal strategies when applying for Social Security benefits.

Gifting in various forms could also be a potential partial solution.

Finally, flexible estate planning can be very helpful in providing options for survivors that will allow them to make better decisions with information that is current when the IRA owner dies. It would likely be advantageous to review and possibly update your entire estate plan, including wills, trusts, and IRA beneficiary designations. Lange’s Cascading Beneficiary Plan, the ultimate in flexible estate planning using disclaimers, will be addressed at our 9:30 a.m. workshop, The Best Estate Plan for Married IRA Owners Combined with Optimal Trust Planning for IRAs and Retirement Plans.

I have been on the forefront of this issue for years, first sounding the alarm in the 2015 second edition of my flagship book, Retire Secure!. And I even went on to write a book specifically on how to mitigate the potentially dire consequences of the Death of the Stretch IRA. Now you can have the opportunity to benefit from my strategic recommendations for navigating these impending changes. The e-book is essentially an update of the rewrite of that book. I have been quoted 36 times in The Wall Street Journal, have written 6 best-selling financial books, including Retire Secure! and The Roth Revolution which has been endorsed by dozens of industry greats including Charles Schwab, Larry King, Ed Slott, Roger Ibbotson, Jane Bryant Quinn, Burton Malkiel and 60 other IRA, legal, and financial experts.

Please see the rest of the workshop invitation at for details of how you can benefit from this information.


Free Workshops

“CPA and attorney Jim Lange (in his book Retire Secure!) provides a road map
for tax-efficient retirement and estate planning.” ― Charles R. Schwab

Cut Taxes on Your IRA Withdrawals with the New Trump Tax Laws!

These Squirrel Hill workshops are especially valuable for married IRA and retirement plan owners
ages 55 – 74 with IRAs or retirement plans of $750,000 or more.
Discover cutting-edge and tested strategies to Retire Secure for Life!

Saturday, June 29, 2019, • Pittsburgh Golf Club
5280 Northumberland Street • Pittsburgh, PA 15217

Saturday, July 20, 2019, • Comfort Inn & Suites
180 Gamma Drive Building B • Pittsburgh, PA 15238
To register for any or all three of our FREE workshops, call 412-521-2732 to reserve your seats.
Both spouses are encouraged to attend and free refreshments will be served.

SESSION 1:  9:30 – 11:30 AM
The Best Estate Plan for Married IRA Owners Combined with Optimal Trust Planning for IRAs and Retirement Plans
Lange’s Cascading Beneficiary Plan (LCBP):
• Our favorite estate plan for over 20 years: 2,500+ plans drafted and hundreds administered.

• Providing financial security for the surviving spouse, and potentially saving hundreds of thousands to pass on to your heirs.

• Should your heirs inherit your IRA directly, or would naming a trust be safer?
• Trusts for minors, or children and grandchildren with special needs.
• Protecting adult children from bad judgment and creditors.
• Should I avoid probate?


SESSION 2:  1:00 – 3:00 PM
Cut Taxes on Your IRA Withdrawals with the New Trump Tax Laws
• 2019 Roth IRA Conversion Opportunity: why now might be the best time ever for Roth conversions.
• Peer-reviewed Roth conversion strategies that could put hundreds of thousands, even millions, of extra dollars in your pocket.
• The best plan for taking distributions from your retirement accounts.
• The single decision that can get you bigger Social Security checks.


SESSION 3:  3:15 – 4:00 PM
Solving the Investor’s Biggest Dilemma: How to Stop Market Volatility from Crushing your Retirement Nest Egg When You Need It Most
• Investor’s Dilemma: I need to take advantage of higher rates of return on investments in a strong market but not fall victim to portfolio-crippling losses in the next market downturn.
• Investor’s Mistakes: Common mistakes that leave investors vulnerable to market downturns, and why to avoid commission and high-fee products.
• Investor’s Solutions: Low-cost index funds, appropriate asset allocation, optimal tax planning, plus an additional critical component that will be revealed in the workshop.
All investing involves risk, including the potential for loss of principal. There is no guarantee that any strategy will be successful. Indexes are not available for direct investment.


Your Speaker: James Lange, CPA/Attorney, and Financial Advisor


James Lange
Jim’s estate and tax planning strategies have been endorsed by The Wall Street Journal (36 times), Newsweek, Money, Bottom Line, and Forbes magazine. He is a regular columnist for


With 35 years of retirement and estate planning experience, Jim and his team have drafted 2,631 will and trusts, as well as sophisticated beneficiary designations for IRAs using Lange’s Cascading Beneficiary Plans.


Jim is the author of six best-selling books including Retire Secure!, The Roth Revolution and The $214,000 Mistake: How to Double Your Social Security and Maximize Your IRAs. His books have been endorsed by Charles Schwab, Larry King, Jane Bryant Quinn, Burton Malkiel, Bill Flanagan and many more.


4 Valuable Bonus Gifts: Yours FREE When You Attend Any Workshop!
1. Retire Secure!, Third Edition. (Price: $24.95)
2. The Roth Revolution: Pay Taxes Once and Never Again. (Price: $18.88)
3. The $214,000 Mistake: How to Double Your Social Security and Maximize Your IRAs. (Price: $9.95)
4. Attendees interested in the preparation of Wills and Trusts, retirement and estate planning advice, or investment advisory services may be eligible for a FREE Retire Secure Initial Consultation with Jim Lange. (Value: $600)


Register to attend Jim Lange’s Free Workshops by calling 412-521-2732 today!




Let’s Test Your Knowledge

The Appropriate Use of Trusts to Protect Your Family