Jan 7th, 2023: The SECURE 2.0 Act: How it Could Affect Your Financial PlanThe SECURE 2.0 Act is a new piece of legislation that was passed last week as part of a larger government-funding package. It includes 92 provisions that are meant to help more Americans save for retirement and increase the size of their retirement savings. Here are some key points about the SECURE 2.0 Act and how it could impact your financial plan:
1) The required minimum distribution age will increase from 72 to 73 next year, and then to 75 in 2033. This means that you will have more time to save aggressively and more flexibility in your retirement plans if you are approaching retirement age.
2) You will be able to make increased catch-up contributions to company retirement plans and individual retirement accounts. This means that if you are 50 or older, you can contribute more money to your retirement accounts to make up for any shortfall in your savings.
3) You will have more flexibility in the use of 529 plans. You will be able to rollover up to $35,000 from a 529 account in your name to a Roth IRA over your lifetime, as long as the 529 account has been open for more than 15 years and you meet certain other conditions.
4) Required minimum distributions (RMDs) will be eliminated for qualified employer Roth plan accounts starting in 2024. This means that if you have a Roth 401(k) account through your employer, you will not be required to take out a certain amount of money from it each year, similar to how Roth IRAs work.
5) You will be able to take early “emergency” distributions from your retirement account to cover unexpected financial needs starting in 2024. These distributions of up to $1,000 will not be subject to the usual 10% tax on early distributions, but you will need to pay it back within a certain time frame or you will not be able to take additional emergency distributions for three years.
6) Your employer may be able to make matching contributions to your retirement plan based on your student loan payments, starting in 2023. This is meant to help people with high student loan debt save for retirement.
7) You will be able to use your 401(k) or IRA account to pay for student loans, subject to certain conditions, starting in 2023.
Overall, the SECURE 2.0 Act is designed to help more Americans save for retirement and increase the size of their retirement savings. It includes a number of provisions that give you more flexibility in your retirement planning and allow you to contribute more money to your retirement accounts. If you have any questions, please do not hesitate to reach out to me.
Please follow and like us:
Please follow and like us:
The SECURE 2.0 Act is a new piece of legislation that was passed last week as part of a larger government-funding package. It includes 92 provisions that are meant to help more Americans save for retirement and increase the size of their retirement savings. Here are some key points about the SECURE 2.0 Act and how it could impact your financial plan:
1) The required minimum distribution age will increase from 72 to 73 next year, and then to 75 in 2033. This means that you will have more time to save aggressively and more flexibility in your retirement plans if you are approaching retirement age.
2) You will be able to make increased catch-up contributions to company retirement plans and individual retirement accounts. This means that if you are 50 or older, you can contribute more money to your retirement accounts to make up for any shortfall in your savings.
3) You will have more flexibility in the use of 529 plans. You will be able to rollover up to $35,000 from a 529 account in your name to a Roth IRA over your lifetime, as long as the 529 account has been open for more than 15 years and you meet certain other conditions.
4) Required minimum distributions (RMDs) will be eliminated for qualified employer Roth plan accounts starting in 2024. This means that if you have a Roth 401(k) account through your employer, you will not be required to take out a certain amount of money from it each year, similar to how Roth IRAs work.
5) You will be able to take early “emergency” distributions from your retirement account to cover unexpected financial needs starting in 2024. These distributions of up to $1,000 will not be subject to the usual 10% tax on early distributions, but you will need to pay it back within a certain time frame or you will not be able to take additional emergency distributions for three years.
6) Your employer may be able to make matching contributions to your retirement plan based on your student loan payments, starting in 2023. This is meant to help people with high student loan debt save for retirement.
7) You will be able to use your 401(k) or IRA account to pay for student loans, subject to certain conditions, starting in 2023.
Overall, the SECURE 2.0 Act is designed to help more Americans save for retirement and increase the size of their retirement savings. It includes a number of provisions that give you more flexibility in your retirement planning and allow you to contribute more money to your retirement accounts. If you have any questions, please do not hesitate to reach out to me.