Secure Act 2.0
The 2nd installment of the SECURE Act 2.0 was signed into law almost three years after The SECURE Act 1.0 was approved. This installment includes more than 90 new retirement plan updates, many of which may not take effect for years.
As a quick refresher…SECURE stands for “Setting Every Community Up for Retirement Enhancement”. The initial legislation included just 12 provisions, the major elements being the termination of the “stretch” component of an inherited IRA and increasing the RMD age from 70 ½ to 72. This bill is more sweeping in scope and unlike its predecessor, it is focused on
Savers (those in the accumulation phase; generally, under age 50)
Roth Related Changes
Catch Up Savers
Birth Year Impact of Secure Act 2.0
1951-1959 RMD pushed back to 73
1960+ RMD pushed back to 75
Business Owners who set up a retirement plan for employees
The SECURE Act 2.0 creates a national searchable lost-and-found online database for forgotten retirement accounts which starts at the end of 2024.
What do I need to do?
For now, review your retirement plan contributions. More information will become available as employers and financial firms absorb the changes.
If you are nearing retirement, this is a good time to refresh your financial plan. Many people will need to tap into their retirement accounts before their RMD takes effect. On the other hand, pushing back the RMD age may create a tax crunch for those who don’t tap into their IRAs sooner. This is something retirees will want to be aware of, particularly with the convergence of social security benefits, potential IRA inheritances, and other income sources.
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