The Master’s Minute

Helpful Tools and Tips

Retirement Planning Enhancements – SECURE Act 2.0

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On December 23, the US House of Representatives passed a bill known as the SECURE Act 2.0 nearly three years to the day of them passing the original SECURE Act. The original bill was passed at the end of 2019 and brought a broad array of changes to the retirement planning landscape, including raising the Required Minimum Distribution (RMD) age to 72 and eliminated the ‘stretch IRA’ for non-spouse beneficiaries.

Like the original SECURE Act, 2.0 attempts to provide opportunity and motivation for individuals and employers to diligently save for retirement. As with most legislation, there are mind-numbing details within this bill. However, here are a few high-level details that will impact most folks:

  • Another Increase to the RMD Age
    • Everyone currently taking RMDs are required to continue as is.
    • The RMD age will increase to 73 for anyone born in years 1951 through 1959.
    • The RMD age will increase to 75 for anyone born in year 1960 or later.
  • Roth Related Changes
    • Creation of SIMPLE and SEP Roth IRAs.
    • Additional employer contributions eligible for Roth treatment.
    • High-wage earners will be required to use Roth options for retirement plan catch-up provisions.
    • With a significant number of limitations, 529 college savings plan will be able to be transferred to Roth IRAs.
  • Increased Catch-up Limits
    • IRA catch-up limits will be indexed for inflation.
    • Starting in 2025, anyone ages 60, 61, 62, or 63 will be eligible for an additional catch-up contribution in a company sponsored retirement plan including SIMPLE plans.

As I mentioned, this is only an extremely high-level review of the SECURE Act 2.0. There are a lot of much less relevant provisions within this bill. If you are just curious or a serious retirement planning nerd, the following link will connect you to an extensive review the SECURE Act 2.0.

As always, if you have any questions about how this legislation impacts you, please don’t hesitate to contact us. The team at Master’s is eager to help you prepare and plan for your ideal future.