Planning Ahead With the FlexIRA™

Many members have a significant portion of their retirement savings in qualified accounts. Qualified accounts are tax-advantaged vehicles designed to save for retirement such as IRAs, 401(k) plans, and 403(b) plans. The accumulated funds in these accounts are the result of years of hard work, patience, and careful planning to support yourself and your loved ones in retirement.

The retirement account owner is often also the person responsible for managing household finances and paying bills. But what happens if you become unable to manage these accounts for yourself? Unfortunately, many members do not plan for the management of retirement assets if they become incapacitated. If you were to become incapacitated, you would need an agent under a Power of Attorney to manage your qualified accounts on your behalf. This requires putting an individual you trust in charge of managing these accounts, which includes:

• Taking any required minimum distributions (RMDs)
• Evaluating investment options
• Considering tax implications
• Navigating the often complex rules established by the Internal Revenue Service and individual state income tax agencies

It is important to give careful consideration as to whether your agent has the financial expertise to make prudent decisions on your behalf, especially at a time when they are worried about your health and well-being, and potentially facing changes in their own daily lives.

There is another option. State Employees’ Credit Union (SECU) Trust Services through Members Trust Company (MTC) offers the FlexIRA, which allows you to remove the stress of making these decisions from a loved one and rely on us to manage these funds on your behalf. The FlexIRA offers unique beneficiary designation options compliant with the SECURE Act of 2019 to provide you with additional flexibility in leaving retirement assets to your loved ones after your lifetime.

There are many situations in which the control and incapacity planning of a FlexIRA may be beneficial:

• Lack of a close, trusted individual who could manage the account on your behalf under a Power of Attorney document
• Coordination with an existing Revocable Living Trust for incapacity planning
• A spouse who does not want the burden or have the experience to manage retirement savings
• Concerns that heirs would spend funds immediately upon your passing

As the account owner, during your healthy years you retain control over the account and can make any needed distributions. If you become incapacitated, SECU Trust Services through MTC can step in to manage the account on your behalf, making any RMDs and paying bills. At your passing, we can continue to manage the FlexIRA for the benefit of your heirs, depending upon the account options you choose.

A FlexIRA can be opened by transferring an existing IRA or rolling over all or a portion of a 401(k), 403(b), or another qualified plan. SECU Trust Services through MTC offers both traditional and Roth options. When opening a FlexIRA, you will designate your beneficiaries as well as the distribution options for those beneficiaries.