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Jan 17, 2023
The SECURE (Setting Every Community Up for Retirement Enhancement) Act 2.0 is an update to the SECURE Act that passed in 2019. The following is a partial outline of changes – there are nearly one hundred in total – along with what this could mean for you or a family member. Please feel free to share this with anyone you think may be affected by these changes.
The Required Minimum Distribution (RMD) age is pushed back to 73 for those born between 1951 and 1959 and pushed back to 75 for those born in 1960 and later. Prior to the SECURE Act 2.0, the RMD starting age was 72. Consequently, those turning 72 in 2023 do not need to take an RMD, as well those turning 73 in 2023 (as they were born in 1950). This implies that no new RMDs will begin for 2023. If you were already taking RMDs (or began taking them at age 72 in 2022), you need to continue taking them in 2023 and each subsequent year. Delaying the income of an RMD by one year may create an additional year for Roth IRA conversions and should take into account the ages and tax considerations of beneficiaries. Qualified charitable distributions (QCDs) can still begin at age 70; however, as part of the annual limit for QCDs, a one-time gift up to $50,000, adjusted annually for inflation, may now be made to a charitable remainder unitrust or annuity trust (CRUT/CRAT) or a charitable gift annuity.
Other notable planning considerations impacting a broader range of individuals include:
Beginning in 2023:
Beginning in 2024:
Beginning in 2025:
As with most legislation, the details matter and it merits a longer discussion on how best to plan for you and your family With thoughtful planning, a significant impact accrues over many years.
Who does this affect and what should you do? We have only highlighted some of the provisions that passed as part of SECURE Act 2.0. Our ask is that you please contact us and give us the opportunity to help you and your family take advantage the opportunities now available to you. It would be an honor to be of value.
This article is for informational purposes only.
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Carissa Yen, FPQP®
Associate Financial Advisor