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SECURE ACT 2.0 - Top 5 Changes That Can Impact You Thumbnail

SECURE ACT 2.0 - Top 5 Changes That Can Impact You

Top 5 Changes That Can Impact You

The SECURE Act 2.0 was signed into law in late 2022 to help Americans bolster their retirement savings and strengthen their long-term financial security. Here are select changes from the SECURE ACT 2.0 of 2022:

529 Plan Rollover to Roth IRAs

Starting in 2024, beneficiaries of 529 plans may roll over up to $35,000 during their lifetime to a Roth IRA. The rollovers will be subject to annual contribution limits and the 529 plan must have been open for more than 15 years.

Increase Catch-Up Contributions Under a Retirement Plan or Individual Retirement Account (IRA)

In 2023, the retirement plan catch-up contribution limit for those over 50 is $7,500. Starting in 2025, catch-up contributions for those ages 60 to 63 will be increased to the greater of $10,000 or 50% more than the regular catch-up contribution amount in 2024. Catch-up contributions will be indexed for inflation starting after 2025. IRA catch-up contribution for an individual who attains age 50 will be indexed for inflation starting in 2024.

Expand Roth Contributions

Roth contributions are now allowed for SIMPLE and SEP IRAs. Employer contributions and employee elective deferrals (if permitted) can be designated as Roth.

Eliminate RMDs for Roth 401(k) Accounts

Starting in 2024, required distributions will no longer need to be taken from Roth 401(k) accounts. 

Increased Required Minimum Distributions (RMD) Age

Increase the beginning date for RMDs from age 72 to 73 starting in 2023 and age 75 in 2033.

While SECURE 2.0 provides increased opportunities to save for retirement, everyone’s financial situation is different. As always, consult with your financial advisor or tax professional to understand how SECURE 2.0 changes apply to you. Please find more information: www.finance.senate.gov/imo/media/doc/Secure%202.0_Section%20by%20Section%20Summary%2012-19-22%20FINAL.pdf

Securities and advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. 

LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial. 

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor. Starkey Financial Partners and LPL Financial do not provide tax and/or legal advice or services.  

This material is being provided for informational or educational purposes only and does not take into account the investment objectives or financial situation of any client or prospective clients. The information is not intended as investment advice and is not a recommendation about managing or investing your retirement savings. If you would like information about your particular investment needs, please contact a financial professional. We do not provide tax, accounting, or legal advice.