As you may remember, the SECURE Act of 2020 changed how we save for retirement and impacted certain IRAs. Congress just passed a new round of legislation—The SECURE Act 2.0—that builds on the SECURE Act to make saving for retirement even easier. Alex Perny of Advanta IRA will discuss the following changes and updates:

– Automatic enrollment of employees to qualified retirement plans
– Early withdrawal provisions from retirement savings
– Changes that impact part-time employees
– Catch-up contributions
– And more

The SECURE Act 2.0 legislation will affect everyone, from fortune 500 companies to self-employed individuals. During this comprehensive webinar, Alex will cover all the pertinent retirement plan changes and everything you need to know to stay informed and maximize your tax savings.

For more information check out our podcast or recent blog

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The Secure Act 2.0 of 2022—Facts You Need to Know

As we enter a new year, it’s important to stay updated on legislative changes that may affect our financial future. One such development is the introduction of the Secure Act 2.0 in 2022. This proposed legislation aims to enhance retirement savings and make it easier for individuals to plan for their golden years. Let’s delve into the facts you need to know about this significant act.

1. Building upon the Secure Act of 2019
The Secure Act 2.0 is a follow-up to the Secure Act of 2019, which brought about several changes to retirement savings rules. Its predecessor increased the age for required minimum distributions (RMDs) from 70 ½ to 72 and eliminated the age restrictions for contributing to traditional IRAs. The Secure Act 2.0 further expands upon these reforms.

2. Raising the RMD age limit
Under the Secure Act 2.0, individuals would benefit from a further increase in the age at which they are required to take RMDs. This proposed change would raise the RMD age limit from 72 to 75, allowing retirees to keep their funds invested for longer and potentially grow their savings.

3. Incentivizing retirement savings for small businesses
The Secure Act 2.0 aims to make it easier for employers, especially small businesses, to offer retirement savings plans to their employees. To encourage participation, the act proposes expanding the tax credits available to businesses that launch retirement plans, increasing the incentives for both employers and employees to save for retirement.

4. Enhancing retirement plan access for part-time workers
Another key aspect of the Secure Act 2.0 is its focus on providing part-time workers with better access to retirement savings plans. Under the proposed legislation, employees who work at least 500 hours per year for three consecutive years would become eligible to participate in their company’s retirement plan. This change would ensure that part-time workers have an opportunity to save for retirement alongside their full-time counterparts.

5. Allowing penalty-free retirement plan withdrawals for new parents
The Secure Act 2.0 addresses the financial challenges faced by new parents by allowing penalty-free withdrawals of up to $5,000 from retirement plans for birth or adoption expenses. This provision seeks to provide additional support to families during significant life milestones while still encouraging long-term saving for retirement.

6. Expanding catch-up contributions for retirement savings
Individuals nearing retirement age often face difficulties in catching up on their savings. The Secure Act 2.0 aims to alleviate this issue by increasing catch-up contribution limits for individuals aged 62 to 64. These individuals would be able to make additional annual contributions to their retirement accounts, allowing them to boost their savings in the final years before retirement.

It’s essential to note that while the Secure Act 2.0 has gained momentum and bipartisan support, it is not yet law. The bill is still in the proposal stage and needs to go through the legislative process before it becomes effective. However, the Secure Act 2.0 reflects the growing recognition of the need to improve retirement savings options and incentivize individuals to plan for their futures.

As we wait for the Secure Act 2.0 to progress, it’s valuable to stay informed about potential changes that may significantly impact retirement savings. Keep an eye on the updates regarding this legislation to stay ahead of the game and make informed decisions regarding your financial goals.