Pensions from all of the eight defined-benefit pension systems of the State (3) and City of New York (5) are exempt from the personal income tax of the State of New York, the City of New York and the City of Yonkers.

With that said, there is only one defined-contribution plan where the same rule applies. It is the Tax-Deferred Annuity 403(b) plan (TDA) administered by the Teachers’ Retirement System of the City of New York. Distributions, regardless of amount, from this particular retirement savings plan are exempt from the State of New York personal income tax, the City of New York personal income tax and the City of Yonkers personal income tax.

Q.: In 2017 I named my three-year-old grandson as the beneficiary of my IRA. I soon realized that upon my death, he could liquidate the account at his sole discretion. This thought led to many sleepless nights inasmuch as I wish to have him take annual distributions based on his life expectancy not only to minimize the tax burden but to see and enjoy the capital growth of the IRA over the many decades to come. The only way I could compel him to use his life expectancy (stretch IRA) in the calculation of his annual distribution was to remove him as the beneficiary and name an IRA trust as the beneficiary of my IRA. I did this in 2018. Now that the SECURE Act has eliminated the stretch IRA for non-spouse beneficiaries, what should I do? P.G.

A.: You need to sit down with the attorney who drew up the IRA trust to see if it’s is still viable or should be dissolved. Under the SECURE ACT, effective Jan. 1, 2020 a non-spouse beneficiary of an IRA must empty out the inherited IRA within 10 years of the death of the IRA owner.

Observation: With that said, those who save and invest all their adult lives should have the reasonable expectation of knowing that decisions they make under existing law will not be repealed by an arrogant act in Washington. The repeal of the stretch IRA for non-spouse beneficiaries was done in order to finance the tax cut for the wealthy.

Mr. Frank is a fee-only Retirement Financial Planner and a retired city high school Teacher of Accounting. He can be reached by phone at (732) 536-9472, or via email at

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