Matthew Curfman, CFP, President & Co-Owner of Richmond Brothers, covers 7 points that caught our interest since Congress passed some new legislation as of December 23, 2022.

0:25 What Secure Act 2.0 is
1:10 When provisions become effective
1:33 RMD age increased
2:14 Missed RMD penalty decreased
2:48 Qualified Charitable Distributions
3:22 SEP/SIMPLE IRA allowing Roth contributions
3:54 Employer match may be made on Roth basis
4:27 New 10% penalty exceptions
4:43 529 account unused fund changes
5:25 What this may mean for some

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The Secure Act 2.0, also known as the Securing a Strong Retirement Act of 2021, has been making headlines recently as it aims to bolster retirement security for Americans. While the original Secure Act was passed in 2019, this new iteration aims to further improve retirement savings and financial planning for individuals. If you’re wondering what this new legislation entails, here are 7 things to know now about the Secure Act 2.0:

1. Expansion of Automatic Enrollment in Retirement Plans: One of the key provisions of the Secure Act 2.0 is the expansion of automatic enrollment in retirement plans. This means that more employees will be automatically enrolled in their employer’s retirement plan unless they choose to opt out. This is aimed at increasing participation and savings rates in retirement plans.

2. Increase in the Age for Required Minimum Distributions (RMDs): Under the current law, individuals are required to start taking distributions from their retirement accounts at age 72. The Secure Act 2.0 proposes increasing this age to 73, providing individuals with more time to grow their retirement savings before being required to take withdrawals.

3. Access to Lifetime Income Options: The legislation aims to make it easier for individuals to access lifetime income options within their retirement plans, such as annuities. This is intended to provide retirees with a more secure and predictable stream of income throughout their retirement years.

4. Expansion of Eligibility for IRA Contributions: The Secure Act 2.0 aims to expand eligibility for individuals to make contributions to traditional Individual Retirement Accounts (IRAs) beyond the current age limit of 70 ½. This provides older individuals with the opportunity to continue saving for retirement even after reaching this age.

5. Encouragement of Small Business Retirement Plans: The legislation includes provisions to encourage small businesses to offer retirement plans to their employees by providing tax credits and other incentives. This is aimed at increasing retirement savings options for workers at small businesses.

6. Incentives for Employer Sponsored Plans: Secure Act 2.0 includes provisions to incentivize employers to offer retirement plans to their employees, such as increasing the tax credit for small employer plan startup costs and providing a credit for plans that include automatic enrollment.

7. Extension of Tax Credits for Small Employer Retirement Plan Startup Costs: The legislation extends the tax credits available to small businesses to help offset the costs of starting and administering a retirement plan for their employees, providing further incentives for employers to offer these benefits.

Overall, the Secure Act 2.0 represents a significant step towards improving retirement security for Americans. By expanding access to retirement plans, increasing incentives for small businesses, and providing more flexibility for individuals to save for retirement, this legislation aims to address the ongoing challenges of ensuring financial security in retirement. It’s important to stay informed about these changes and consider how they may impact your own retirement planning. Be sure to consult with a financial advisor or retirement planning professional to understand how the Secure Act 2.0 may affect your own financial situation and what steps you can take to make the most of these new opportunities.