Latest news with #SECURE
Cision Canada
02-05-2025
- Business
- Cision Canada
SECURE ANNOUNCES RESULTS OF THE 2025 ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
CALGARY, AB, May 2, 2025 /CNW/ - SECURE Waste Infrastructure Corp. ("SECURE" or the "Corporation") (TSX: SES), a leading waste management and energy infrastructure company, is pleased to announce that all of the nominees proposed as directors and listed in the management information circular dated March 17, 2025, were elected as directors of the Corporation at its Annual and Special Meeting of the Shareholders held on May 2, 2025 (the "Meeting"). KPMG LLP was also reappointed as the Corporation's independent auditors at the Meeting. A recording of the Meeting is available on SECURE's website at Detailed results of the vote for the election of directors held at the Meeting are set out below: In addition, the resolution regarding the approval of the Corporation's Omnibus Incentive Plan, and the unallocated awards reserved for issuance thereunder, and the resolution regarding the approval on a non-binding and advisory basis of the Corporation's approach to executive compensation were also approved at the Meeting as follows: Votes For % For Votes Against % Against Ordinary resolution to approve the Corporation's Omnibus Incentive plan and all unallocated awards under the Omnibus Incentive Plan 170,040,449 95.162 % 8,645,131 4.838 % Votes For % For Votes Withheld % Against Approval on a non-binding and advisory basis of the Corporation's approach to executive compensation 173,896,058 97.320 % 4,789,522 2.680 % ABOUT SECURE SECURE is a leading waste management and energy infrastructure business headquartered in Calgary, Alberta. The Corporation's extensive infrastructure network located throughout western Canada and North Dakota includes waste processing and transfer facilities, industrial landfills, metal recycling facilities, crude oil and water gathering pipelines, crude oil terminals and storage facilities. Through this infrastructure network, the Corporation carries out its principal business operations, including the collection, processing, recovery, recycling and disposal of waste streams generated by our energy and industrial customers and gathering, optimization, terminalling and storage of crude oil and natural gas liquids. The solutions the Corporation provides are designed not only to help reduce costs, but also lower emissions, increase safety, manage water, recycle by-products and protect the environment. SECURE's shares trade under the symbol SES and are listed on the Toronto Stock Exchange.
Cision Canada
02-05-2025
- Business
- Cision Canada
SECURE ANNOUNCES 2025 FIRST QUARTER RESULTS
CALGARY, AB, May 2, 2025 /CNW/ - SECURE Waste Infrastructure Corp. ("SECURE" or the "Corporation") (TSX: SES), a leading waste management and energy infrastructure company, reported today its operational and financial results for the three months ended March 31, 2025. "Following a strong 2024, we remain on track with our 2025 objectives," said Allen Gransch, President and CEO. "Our first-quarter performance demonstrates the consistency of our core infrastructure business and our ability to generate stable, high-quality earnings in a dynamic market environment. Our network continues to support recurring industrial and energy-related volumes across western Canada and North Dakota." "With a leverage ratio of 1.3x at March 31, 2025, SECURE has the financial strength and flexibility to advance our strategic priorities," continued Gransch. "We are pleased to accelerate our share buybacks planned for 2025 through the launch of a Substantial Issuer Bid in April, offering to repurchase up to $200 million of our common shares. At the same time, we are integrating our recently acquired metals recycling business and funding our expanded capital program. This additional capital is being directed toward growth opportunities backed by strong commercial agreements that provide long-term, reliable cash flows." He added, "These investments expand our infrastructure footprint, enhance our ability to transform waste into value, and position us to deliver sustainable growth and long-term shareholder returns – all while continuing to maintain a solid financial position." FIRST QUARTER RESULTS Adopted new name of SECURE Waste Infrastructure Corp. on January 1, 2025, aligning our identity with the critical role we play in waste and energy infrastructure. Closed the acquisition of a metals recycling business on January 31, 2025, for $162 million, including certain working capital. The acquisition establishes a new hub for our metal recycling network in the Edmonton market and significantly increases our scale and processing capabilities. Determined not to proceed with the previously announced $18 million acquisition in our metals recycling business as final negotiations and due diligence did not meet management expectations. Entered into a 10-year commercial agreement with a senior exploration and production company for water disposal services in the Montney resource play. The agreement ensures the customer reliable access to cost-efficient produced water transportation and disposal, while providing SECURE with a stable return on invested capital through guaranteed commitments for the facility. Generated revenue (excluding oil purchase and resale) of $371 million and net income of $38 million ($0.16 per basic share). Achieved Adjusted EBITDA 1 of $121 million ($0.52 per basic share 1) and an Adjusted EBITDA margin 1 of 33%. Generated funds flow from operations to $81 million ($0.35 per basic share), and discretionary free cash flow 1 of $67 million ($0.29 per basic share). Incurred growth capital expenditures of $29 million, directed towards completing the Phase 3 expansion of our Clearwater heavy oil terminalling and gathering infrastructure and progressing other active development projects. Repurchased 5,282,000 common shares at a weighted average price per share of $14.96 for a total cost of $79 million pursuant to the Corporation's normal course issuer bid ("NCIB"). Paid a quarterly dividend of $0.10 per common share, which currently represents an attractive yield of 3.1% on our common shares. Ended the quarter with a Total Debt to EBITDA covenant ratio 2 of 1.6x (1.3x excluding leases). (1) Non-GAAP financial measure or Non-GAAP ratio. Refer to the "Non-GAAP and other specified financial measures" section herein. (2) Calculated in accordance with the Corporation's credit facility agreements. Refer to the Q1 2025 Management's Discussion and Analysis ("MD&A"). 2025 OUTLOOK Ongoing macroeconomic volatility, including uncertainty surrounding tariffs, recessionary concerns, and the recent decline in commodity prices, has contributed to a weakening economic outlook and increased uncertainty for our customers as they assess the potential impacts on their businesses. In response, our customers are approaching the current environment with caution, emphasizing discipline, operational efficiency, and prudent capital allocation. Amid these conditions, we remain committed to delivering value to our customers while strengthening our position as a leader in waste management and energy infrastructure. Our infrastructure is designed to support recurring waste streams generated by both oil and gas production and industrial activities. However, lower commodity prices and a recessionary backdrop may reduce activity levels, which will have some impact to our business operations. Based on the current economic environment and underlying economic trends, the Corporation is providing the following guidance for the remainder of 2025: We are maintaining our Adjusted EBITDA guidance of $510 million to $540 million. While our outlook reflects a more cautious stance in light of the potential slowdown in activity levels outlined above and the decision not to proceed with a previously announced $18 million acquisition in the metals recycling business, our core infrastructure supports recurring waste and energy streams and is built to perform across all cycles. We expect discretionary free cash flow of $270 million to $300 million. We are increasing our organic growth capital program by $40 million to $125 million for 2025. The increase relates to an executed contract with an anchor tenant to provide produced water infrastructure for a 10-year term in the Montney region of Alberta. This new produced water processing facility is expected to be in service in the first quarter of 2026. Total growth projects planned for 2025 include: Completion of the phase 3 expansion of the Clearwater heavy oil terminal and gathering infrastructure for incremental clean heavy oil delivery, including adding treating capabilities for trucked-in emulsion volumes backed by anchor tenants. This project was completed and operational in the first quarter, with the terminal now having total capacity of 75,000 barrels per day. Two produced water processing and disposal facilities that include pipeline infrastructure in the Alberta Montney region to accommodate growing producer volumes. The new facilities are both backed by 10-year produced water contracts with large reputable counterparties. One facility is expected to be operational in the fourth quarter of 2025, with the second scheduled to be in service in the first quarter of 2026. Reopening a suspended industrial waste processing facility located in Alberta's Industrial Heartland to meet local demand. Capital expenditures are underway and include replacing and upgrading critical infrastructure to increase capacity and allow for broader waste acceptance and treatment, which is expected to occur in the third quarter of 2025. Purchasing incremental rail cars, bringing SECURE's fleet to approximately 200 rail cars, and increasing the efficiency of our metals recycling logistics and distribution operations. Optimizing our waste infrastructure network to debottleneck, increase throughput, achieve cost saving, and drive higher Adjusted EBITDA from same store sales. We are maintaining our $85 million sustaining capital and $15 million asset retirement obligation spend. We expect to complete up to $200 million of common share repurchases under the Substantial Issuer Bid in the second quarter of 2025. Further buybacks under the NCIB will remain at the discretion of management and the Board of Directors. We are maintaining our quarterly dividend of $0.10 per share ($0.40 annualized), equal to approximately $92 million annualized based on current shares outstanding. We are confident in our ability to adapt to evolving economic conditions and remain committed to delivering long-term value through resilient operations, disciplined growth, and a sharp focus on sustainability and safety. SECURE's strong balance sheet and robust projected cash flows provide meaningful flexibility to execute on our capital allocation priorities. In 2025, this includes funding growth through our organic capital program and the acquisition of a metals recycling business completed on January 31, 2025, while also enhancing shareholder returns through share repurchases and a stable quarterly dividend. FIRST QUARTER 2025 CONFERENCE CALL SECURE will host a conference call on Friday, May 2, 2025, at 9:00 a.m. MST to discuss the first quarter results. To participate in the conference call, dial 437-900-0527 or toll free 1-888-510-2154. To access the simultaneous webcast, please visit For those unable to listen to the live call, a taped broadcast will be available at and, until midnight MST on Friday, May 9, 2025, by dialing 1-888-660-6345 and using the pass code 80355#. ABOUT SECURE SECURE is a leading waste management and energy infrastructure business headquartered in Calgary, Alberta. The Corporation's extensive infrastructure network located throughout western Canada and North Dakota includes waste processing and transfer facilities, industrial landfills, metal recycling facilities, crude oil and water gathering pipelines, crude oil terminals and storage facilities. Through this infrastructure network, the Corporation carries out its principal business operations, including the collection, processing, recovery, recycling and disposal of waste streams generated by our energy and industrial customers and gathering, optimization, terminalling and storage of crude oil and natural gas liquids. The solutions the Corporation provides are designed not only to help reduce costs, but also lower emissions, increase safety, manage water, recycle by-products and protect the environment. SECURE's shares trade under the symbol SES and are listed on the Toronto Stock Exchange. NON-GAAP AND OTHER SPECIFIED FINANCIAL MEASURES The Corporation uses accounting principles that are generally accepted in Canada (the issuer's "GAAP"), which includes International Financial Reporting Standards ("IFRS"). This news release contains certain measures that are considered "specified financial measures" (being either "non-GAAP financial measures", "non-GAAP ratios", "capital management measures" or "supplementary financial measures", as applicable) as defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosures, including: Adjusted EBITDA and Discretionary Free Cash Flow (non-GAAP financial measures); Adjusted EBITDA per basic and diluted share, and discretionary free cash flow per basic and diluted share (non-GAAP ratios); Total Debt (capital management measure); and funds flow from operations per basic and diluted share (supplementary financial measures) which do not have any standardized meaning as prescribed by IFRS. These measures are intended as a complement to results provided in accordance with IFRS. The Corporation believes these measures provide additional useful information to analysts, shareholders and other users to understand the Corporation's financial results, profitability, cost management, liquidity and ability to generate funds to finance its operations. However, these measures should not be used as an alternative to IFRS measures because they are not standardized financial measures under IFRS and therefore might not be comparable to similar financial measures disclosed by other companies. See the "Non-GAAP and other specified financial measures" section of the Corporation's MD&A for the three months ended March 31, 2025 and 2024 for further details, which is incorporated by reference herein and available on SECURE's profile at and on our website at Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted EBITDA per basic and diluted share Adjusted EBITDA is calculated as noted in the table below and reflects items that the Corporation considers appropriate to adjust given the irregular nature and relevance to comparable operations. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue (excluding oil purchase and resale). Adjusted EBITDA per basic and diluted share is defined as Adjusted EBITDA divided by basic and diluted weighted average common shares. For the three and twelve months ended December 31, 2024 and 2023, transaction and related costs have been adjusted as they are costs outside the normal course of business. The following table reconciles the Corporation's net income, being the most directly comparable financial measure disclosed in the Corporation's financial statements, to Adjusted EBITDA for the three months ended March 31, 2025 and 2024. (1) Included in cost of sales and/or general and administrative ("G&A") expenses on the Consolidated Statements of Comprehensive Income. (2) Included in G&A expenses on the Consolidated Statements of Comprehensive Income (3) Includes amounts reported in revenue on the Consolidated Statements on Comprehensive Income. Discretionary free cash flow and discretionary free cash flow per basic and diluted share Discretionary free cash flow is defined as funds flow from operations adjusted for sustaining capital expenditures, and lease payments. The Corporation may deduct or include additional items in its calculation of discretionary free cash flow that are unusual, non-recurring, or non-operating in nature. Discretionary free cash flow per basic and diluted share is defined as discretionary free cash flow divided by basic and diluted weighted average common shares. For the three months ended March 31, 2025 and 2024, transaction and related costs have been adjusted as they are costs outside the normal course of business. The following table reconciles the Corporation's funds flow from operations, being the most directly comparable financial measure disclosed in the Corporation's financial statements, to discretionary free cash flow. (1) The Corporation classifies capital expenditures as either growth, acquisition or sustaining capital. Refer to "Operational Definitions" in the MD&A for further information. FINANCIAL STATEMENTS AND MD&A The Corporation's consolidated financial statements and notes thereto and MD&A for the three months ended March 31, 2025 and 2024 are available on SECURE's website at and on SEDAR+ at Certain statements contained or incorporated by reference in this press release constitute "forward-looking statements and/or "forward-looking information" within the meaning of applicable securities laws (collectively referred to as "forward-looking statements"). When used in this press release, the words "achieve", "advance", "anticipate", "believe", "can be", "capacity", "commit", "continue", "could", "deliver", "drive", "enhance", "ensure", "estimate", "execute", "expect", "focus", "forecast", "forward", "future", "goal", "grow", "integrate", "intend", "may", "maintain", "objective", "ongoing", "opportunity", "outlook", "plan", "position", "potential", "prioritize", "realize", "remain", "result", "seek", "should", "strategy", "target" "will", "would" and similar expressions, as they relate to SECURE, its management are intended to identify forward-looking statements. Such statements reflect the current views of SECURE and speak only as of the date of this press release. In particular, this press release contains or implies forward-looking statements pertaining but not limited to: SECURE's 2025 guidance, including with respect to Adjusted EBITDA, planned capital expenditures and growth projects (including for organic growth capital, sustaining capital and ARO expenditures), and projected discretionary free cash flow; anticipated timing with respect to SECURE's new produced water processing facility; SECURE's expectations and priorities for 2025 and beyond and its ability and position to achieve such priorities; SECURE's business plans, objectives, goals, targets, priorities and strategies; expectations with respect to the substantial issuer bid, including with respect to the aggregate dollar amount of common shares expected to be repurchased and timing thereof; SECURE's expectations related to economic drivers and the corresponding demand for our services; expectations and uncertainty with respect to the economy, evolving economic conditions and the industrial landscape in North America; the Corporation's expectation that low leverage and strong projected cash flows provides SECURE with meaningful capital allocation flexibility; expectations with respect to the benefits to be achieved and realized from the acquisition of the metals recycling business; SECURE's expectation to continue to deliver industry leading margins, and a stable cash flow profile underpinned by recurring volumes driven by industrial waste, metals, and energy markets; SECURE's dividend policy, and the declaration, timing and amount of dividends thereunder; statements concerning shareholder returns and the NCIB, including the duration of the NCIB, the number of common shares which may be purchased under the NCIB, the timing, amount and price of purchases of common shares under the NCIB; and other statements. Forward-looking statements are based on certain assumptions that SECURE has made in respect thereof as at the date of this press release regarding, among other things: SECURE's 2025 expectations; economic and operating conditions, including commodity prices, crude oil and natural gas storage levels, interest rates, exchange rates, and inflation; ability to enter into signing agreements with customers to backstop the investments and acquisition opportunities present; continued demand for the Corporation's infrastructure services and activity linked to long-term and recurring projects; the expectation with respect to the commercial agreements entered into by SECURE for water disposal services in the Montney resource play and the benefits derived therefrom; the changes in market activity and growth will be consistent with industry activity in Canada and the U.S. and growth levels in similar phases of previous economic cycles; expectations and responses of SECURE's customers in response to economic concerns and instability; infrastructure developments in western Canada; increased capacity and stronger pricing with access to global markets through new infrastructure; the impact of any new pandemic or epidemic and other international or geopolitical events, including government responses related thereto and their impact on global energy pricing, oil and gas industry exploration and development activity levels and production volumes; anticipated sources of funding being available to SECURE on terms favourable to SECURE; the success of the Corporation's operations and growth projects; the impact of seasonal weather patterns; the Corporation's competitive position, operating, acquisition and sustaining costs remaining substantially unchanged; the Corporation's ability to attract and retain customers; that counterparties comply with contracts in a timely manner; current commodity prices, forecast taxable income, existing tax pools and planned capital expenditures; that counterparties comply with contracts in a timely manner; that there are no unforeseen events preventing the performance of contracts or the completion and operation of the relevant facilities; that there are no unforeseen material costs in relation to the Corporation's facilities and operations; that prevailing regulatory, tax and environmental laws and regulations apply or are introduced as expected, and the timing of such introduction; increases to the Corporation's share price and market capitalization over the long term; disparity between the Corporation's share price and the fundamental value of the business; the Corporation's ability to repay debt and return capital to shareholders; credit ratings; the Corporation's ability to obtain and retain qualified personnel (including those with specialized skills and knowledge), technology and equipment in a timely and cost-efficient manner; the Corporation's ability to access capital and insurance; operating and borrowing costs, including costs associated with the acquisition and maintenance of equipment and property; the ability of the Corporation and our subsidiaries to successfully market our services in western Canada and the U.S.; an increased focus on environmental, social and governance ("ESG"), sustainability and environmental considerations in the oil and gas industry; the impacts of climate-change on the Corporation's business; the current business environment remaining substantially unchanged; present and anticipated programs and expansion plans of other organizations operating in the energy service industry resulting in an increased demand for the Corporation's and our subsidiaries' services; future acquisition and maintenance costs; the Corporation's ability to achieve its ESG and sustainability targets and goals and the costs associated therewith; and other risks and uncertainties described in SECURE's Annual Information Form for the year ended December 31, 2024 ("AIF") and from time to time in filings made by SECURE with securities regulatory authorities. Forward-looking statements involve significant known and unknown risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved. Readers are cautioned not to place undue reliance on these statements as a number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements, including but not limited to: general global financial conditions, including general economic conditions in Canada and the U.S.; the effect of any tariffs currently imposed, including the delay or escalation of any such tariffs, or the implementation of any new or additional tariffs, surtaxes, export bans, or other restrictive trade measures or countermeasures affecting international trade, including between the U.S. and Canada; the effect of any pandemic or epidemic, inflation and international or geopolitical events and governmental responses thereto on economic conditions, commodity prices and the Corporation's business and operations; changes in the level of capital expenditures made by oil and natural gas producers and the resultant effect on demand for oilfield services during drilling and completion of oil and natural gas wells; volatility in market prices for oil and natural gas and the effect of this volatility on the demand for oilfield services generally; a transition to alternative energy sources; the Corporation's inability to retain customers; risks inherent in the energy industry, including physical climate-related impacts; the Corporation's ability to generate sufficient cash flow from operations to meet our current and future obligations; the seasonal nature of the oil and gas industry; increases in debt service charges including changes in the interest rates charged under the Corporation's current and future debt agreements; inflation and supply chain disruptions; the Corporation's ability to access external sources of debt and equity capital and insurance; disruptions to our operations resulting from events out of our control; the timing and amount of stimulus packages and government grants relating to site rehabilitation programs; the cost of compliance with and changes in legislation and the regulatory and taxation environment, including uncertainties with respect to implementing binding targets for reductions of emissions and the regulation of hydraulic fracturing services and services relating to the transportation of dangerous goods; uncertainties in weather and temperature affecting the duration of the oilfield service periods and the activities that can be completed; ability to maintain and renew the Corporation's permits and licenses which are required for its operations; competition; impairment losses on physical assets; sourcing, pricing and availability of raw materials, consumables, component parts, equipment, suppliers, facilities, and skilled management, technical and field personnel; supply chain disruption; the Corporation's ability to effectively complete acquisition and divestiture transactions on acceptable terms or at all; failure to realize the benefits of acquisitions or dispositions and risks related to the associated business integration (including specifically with respect to the two strategic acquisitions in the metals recycling business); risks related to a new business mix and significant shareholder; liabilities and risks, including environmental liabilities and risks inherent in SECURE's operations; the Corporation's ability to invest in and integrate technological advances and match advances of our competition; the viability, economic or otherwise, of such technology; credit, commodity price and foreign currency risk to which the Corporation is exposed in the conduct of our business; compliance with the restrictive covenants in the Corporation's current and future debt agreements; the Corporation's or our customers' ability to perform their obligations under long-term contracts; misalignment with our partners and the operation of jointly owned assets; the Corporation's ability to source products and services on acceptable terms or at all; the Corporation's ability to retain key or qualified personnel, including those with specialized skills or knowledge; uncertainty relating to trade relations and associated supply disruptions; the effect of changes in government and actions taken by governments in jurisdictions in which the Corporation operates, including in the U.S.; the effect of climate change and related activism on our operations and ability to access capital and insurance; the effects of the introduction of greenwashing regulations in the jurisdictions in which we operate; cyber security and other related risks; the Corporation's ability to bid on new contracts and renew existing contracts; potential closure and post-closure costs associated with landfills operated by the Corporation; the Corporation's ability to protect our proprietary technology and our intellectual property rights; legal proceedings and regulatory actions to which the Corporation may become subject, including in connection with any claims for infringement of a third parties' intellectual property rights; the Corporation's ability to meet its ESG targets or goals and the costs associated therewith; claims by, and consultation with, Indigenous Peoples in connection with project approval; disclosure controls and internal controls over financial reporting; and other risk factors identified in the AIF and from time to time in filings made by the Corporation with securities regulatory authorities. The guidance in respect of the Corporation's expectations of Adjusted EBITDA, capital expenditures (including organic growth capital, sustaining capital and ARO expenditures), and discretionary free cash flow in 2025 in this press release may be considered to be a financial outlook for the purposes of applicable Canadian securities laws. Such information is based on assumptions about future events, including economic conditions and proposed courses of action, based on management's assessment of the relevant information currently available, and which may become available in the future. These projections constitute forward-looking statements and are based on several material factors and assumptions set out above. Actual results may differ significantly from such projections. See above for a discussion of certain risks that could cause actual results to vary. The financial outlook contained in this press release has been approved by management as of the date of this press release. Readers are cautioned that any such financial outlook contained herein should not be used for purposes other than those for which it is disclosed herein. SECURE and its management believe that the financial outlook contained in this press release has been prepared based on assumptions that are reasonable in the circumstances, reflecting management's best estimates and judgments, and represents, to the best of management's knowledge and opinion, expected and targeted financial results. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Although forward-looking statements contained in this press release are based upon what the Corporation believes are reasonable assumptions, the Corporation cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements in this press release are made as of the date hereof and are expressly qualified by this cautionary statement. Unless otherwise required by applicable securities laws, SECURE does not intend, or assume any obligation, to update these forward-looking statements.
Yahoo
21-04-2025
- Business
- Yahoo
I Inherited My Husband's 401(k) With $615k. How Do Handle This Money to Reduce Taxes?
SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. Inheriting a retirement account can be complicated. With a retirement account that you opened, you're referred to as the original owner. You can contribute to this portfolio, manage it as you see fit, and leave the money in place subject only to required minimum distributions (RMDs) in some cases. When you inherit a retirement account, the rules change. You cannot make new contributions and, depending on your relationship to the original owner, you may need to withdraw this money within 10 years of receiving it. With an inherited account, the most important distinction is between "designated beneficiaries" and "eligible designated beneficiaries." An eligible designated beneficiary has far more leeway to manage the inherited account as they see fit, with potentially significant tax implications. For example, say that your husband has passed, leaving you his 401(k) with $615,000 in it. As a spousal beneficiary, you have a broad range of options for how you can manage this money. And if you need guidance specific to your situation, you can always consult with a financial advisor. Inheriting a tax-advantaged retirement account is subject to different rules than inheriting a standard investment portfolio. Most notably, you cannot make additional contributions to this account. Beyond that, the IRS has rules for how long you can leave this money in place based on which category of heir you fall into: spousal beneficiaries, eligible designated beneficiaries or designated beneficiaries. Readers should note that we will discuss the rules for accounts inherited in 2020 and later, as those rules were changed in the SECURE and SECURE 2.0 Acts. These rules also apply to inherited Roth accounts, even though a Roth portfolio is typically exempt from RMD rules. Spousal beneficiaries are considered a subcategory of eligible designated beneficiaries. You are a spousal beneficiary if the retirement account belonged to your spouse at the time of their death. If you are a spousal beneficiary, you have three options. You may: Take RMD distributions from the account, based on either your life expectancy or the original owner's life expectancy Withdraw the entire amount within 10 years (the 10 Year Rule) Roll the account into your own IRA The availability of these options can depend on the status of this retirement account at the time of your spouse's death. Rolling inherited funds into your own IRA will not change the rules of that account. You can continue making contributions to the IRA as usual, regardless of the inherited assets. Consider speaking with a financial advisor about your specific case. The right financial advisor can help you navigate the rules and execute your strategy. An eligible designated beneficiary is someone who meets one of a handful of specific qualifications. This includes: The spouse of the deceased (see above) A minor child of the deceased A disabled or chronically ill individual An individual no more than 10 years younger than the deceased If you are an eligible designated beneficiary other than a spouse, you have the following options: Take RMD distributions based on the longer of either your life expectancy or the deceased's life expectancy Withdraw the entire amount within 10 years (the 10 Year Rule) You cannot roll this account into another IRA. If you withdraw the funds under the 10 Year Rule, you must take out the assets and trigger a tax event. Designated beneficiaries are all heirs who are not considered eligible designated beneficiaries. Put another way, if you do not meet one of the categories above, you are a designated beneficiary. These heirs must follow the 10 Year Rule, meaning that they must withdraw all assets from the inherited account within 10 years of inheriting it. Inheriting a retirement account raises tax issues. This is by design, since the IRS wants to ensure that tax-advantaged portfolios are emptied and taxed without simply being handed off from generation to generation. As explained by financial and insurance advisor Lucas Barcelo, founder of Thrivin' Life, "you have a few solid options [and] the best path for you is going to be determined by your current situation… For example, your age, your tax bracket, and your expected income in retirement to name a few." A can always help you determine and manage your tax liability. Here, you are a spousal beneficiary with $615,000 in an inherited 401(k). While you cannot make additional contributions to this account, you have a broad range of options for managing it. This includes: As a spousal beneficiary, you may roll your husband's entire 401(k) into an IRA that you own. This is, said Barcelo, "by far the easiest (and usually smartest) move." If you roll the money into a traditional IRA, this rollover will not trigger a tax event. That means that, in the immediate future, this can be an effective way to manage taxes. Rolling the money into a Roth IRA will trigger a tax event in the form of conversion taxes, as you will need to pay income taxes on all money rolled into a Roth IRA. Here, you would expect to pay an estimated $180,514 in conversion taxes if you rolled the money over all at once, potentially leaving you with about $434,486 in the Roth IRA. Once the money has been put in an IRA for which you are the original owner, you can continue to make additional contributions with qualified money. If you put the money into a traditional IRA, it will be subject to RMDs based on your life expectancy. You will need to begin taking taxed distributions at age 73 or 75 depending on your current age. (For ease of use, we will refer to the current age of 73 in this article.) Alternatively, you can leave this money in place. If you do so, you are free to manage the 401(k) based on your own financial plan. You will then be required to take RMDs based on either your life expectancy or your husband's life expectancy, meaning that you must take RMDs either when you turn 73 or when he would have. These minimum distributions will be taxed. The exact amount will depend on how much is in the account when you begin taking distributions. For example, say that you are currently 73 and you begin taking distributions immediately. You would be required to take approximately $23,207 in minimum distributions. With $75,000 in current income, that would give you about $98,207 in combined income, and $13,446 in total federal income taxes. Whether you use your or your husband's life expectancy tables to make RMDs, once you begin taking distributions, you will need to continue doing so until the account is emptied. Depending on your specific circumstances, you might also need to empty the account within 10 years regardless of the current status of your RMDs. As a spousal beneficiary, you have the option of taking either required minimum distributions or use the 10 year rule. Depending on the circumstances, this can allow you to keep your money in place even past when RMDs would usually begin. Barcelo explained: "In the scenario [where] the deceased spouse was not currently taking RMDs, the surviving spouse can choose to delay taking funds for up to 10 years (at which point the entire account must be liquidated or rolled over into the survivor's IRA) even if in that 10 year time, the surviving spouse has RMD obligations on their own retirement accounts." This means that you can use an inherited retirement account to leave funds in place even after you begin taking money from your other accounts, potentially up to age 73 or 75 depending on your individual circumstances. If the deceased had already begun taking RMDs, Barcelo said, then the account will remain subject to minimum distributions. "If RMD's do not fully drain the account in the 10 year time, then when that time comes, the survivor would have to roll over the balance or cash out the entirety." Using the 10 Year Rule, you can best minimize taxes with staggered withdrawals. Leaving the money in place will maximize your compounding returns. However, any plan in which you withdraw the money in one lump sum will also maximize your tax event. If you withdraw this money in smaller increments, one year at a time, you will reduce your tax bracket and effective tax rate, and as a result hold down your taxes. Remember, you can use this free tool if you're interested in speaking with a financial advisor. Inherited retirement accounts can be very tricky. If your spouse has died and left you their portfolio, one common path is to roll it into your own IRA. But if that's not the best plan right now, you have several other options. A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with vetted financial advisors who serve your area. You can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now. Don't let this stuff come as a surprise. Estate planning can be a grim task, but you don't want your loved ones having to figure out their rights and responsibilities after the fact. Keep an emergency fund on hand in case you run into unexpected expenses. An emergency fund should be liquid — in an account that isn't at risk of significant fluctuation like the stock market. The tradeoff is that the value of liquid cash can be eroded by inflation. But a high-interest account allows you to earn compound interest. Compare savings accounts from these banks. Are you a financial advisor looking to grow your business? SmartAsset AMP helps advisors connect with leads and offers marketing automation solutions so you can spend more time making conversions. Learn more about SmartAsset AMP. Photo credit: Grok The post I Inherited My Husband's 401(k) With $615k. How Do Handle This Money to Reduce Taxes? appeared first on SmartReads by SmartAsset. Sign in to access your portfolio
Los Angeles Times
19-03-2025
- Business
- Los Angeles Times
The SECURE Act 2.0 Presents Key Differences Over 1.0 Version – Do You Need To Modify a Trust?
The Setting Every Community Up for Retirement Enhancement (SECURE) Act, signed into law in 2019, brought significant changes to retirement account distribution rules. The subsequent passage of SECURE Act 2.0 in December 2022 further expanded and refined these regulations, impacting individual retirement accounts (IRAs), employer-sponsored plans, and estate planning strategies. A crucial aspect of these legislative changes is the impact on trusts named as beneficiaries of retirement accounts. This article compares SECURE Act 2.0 to prior law and explains why trusts that were designed before its enactment must be modified to align with the new legal framework. Prior to the SECURE Act, trusts were often structured as 'conduit trusts' or 'accumulation trusts' to take advantage of the stretch IRA provisions, allowing RMDs to be distributed gradually over the beneficiary's lifetime. However, under the SECURE Act's 10-year rule, these trusts may no longer function as intended, leading to unintended tax consequences and administrative issues. The SECURE Act 2.0 continues to reshape retirement and estate planning. Trusts that were structured before these changes may no longer align with the new distribution rules, potentially causing unintended tax burdens and limiting beneficiary protections. Anyone with a trust as the beneficiary of a retirement account should review and modify their estate plan with a qualified professional to ensure compliance with the latest laws and optimize tax efficiency. By understanding the nuances of SECURE Act 2.0 and adjusting trust provisions accordingly, individuals can better protect their assets, reduce tax exposure and ensure a smoother transition of wealth to future generations.
