On 12/29/22, President Biden signed a $1.7 Trillion Spending Bill which includes 7 retirement changes, dubbed by some to be “SECURE 2.0”. This video discusses the changes that will take effect 2023 – 2026.
In addition to my video, this is the most comprehensive, non-partisan synopsis I’ve seen. …(read more)
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SECURE 2.0: 7 Changes to Retirement
The Setting Every Community Up for Retirement Enhancement (SECURE) Act was passed in 2019 and brought significant changes to retirement savings and planning. Now, the SECURE 2.0 act is on the horizon, proposing even more changes to retirement for American workers. Here are 7 changes that we can expect to see if SECURE 2.0 is passed into law.
1. Increase in Required Minimum Distribution (RMD) age: The current RMD age is 72, but SECURE 2.0 proposes to increase this to 75. This change would allow retirees to keep more money in their retirement accounts for a longer period of time, potentially increasing their financial security in later years.
2. Automatic enrollment in retirement plans: SECURE 2.0 aims to increase retirement plan coverage by requiring employers with 401(k) plans to automatically enroll their employees. This would encourage more workers to save for retirement and increase overall retirement savings.
3. Small business retirement plans: The act would offer tax credits to small businesses that establish retirement plans for their employees. This would make it easier for small businesses to provide retirement benefits to their workers and help more Americans save for their futures.
4. Catch-up contributions for 401(k) plans: Currently, individuals aged 50 and older can make catch-up contributions to their retirement accounts. SECURE 2.0 proposes to increase the catch-up contribution limit, allowing older workers to boost their retirement savings even more.
5. Student loan assistance and retirement savings: The act would allow employers to contribute to their employees’ retirement accounts when the employees are making student loan payments. This would incentivize workers to continue saving for retirement even as they work to pay off their student loans.
6. Lifetime income disclosure for retirement accounts: SECURE 2.0 would require retirement plan statements to include an estimate of how much monthly income an individual’s account balance could provide in retirement. This would help workers understand how their savings translate into future income and make more informed decisions about their retirement planning.
7. Changes to Roth IRA rules: The act proposes to eliminate the maximum age for contributions to traditional IRAs and increase the age for required minimum distributions from 72 to 75. These changes would give older individuals more flexibility in managing their retirement savings.
Overall, SECURE 2.0 aims to improve retirement security for Americans by increasing access to retirement plans, making it easier for small businesses to provide retirement benefits, and offering incentives for individuals to save for their futures. If passed, these changes could have a significant impact on the retirement landscape in the United States. It’s important for individuals to stay informed and consider how these potential changes could affect their own retirement plans.
Debbie, could you please put the date of your recordings into the title? That way we will know if it's pertinent to 2024 or if it's an older episode. Thanks for all you do!
My husband has been a OWCP benefit recipient for 11 years. How likely will OWCP stop his benefit when he reaches his full retirement age at 66 and 10 months? Thank you so much for providing us the useful information in all your videos!
In 2033, Section 107 of the Secure Act will require 75 year olds to begin taking RMDs. But 2 years earlier, those same people will be age 73 and required to take RMDs in 2031. So the increase at 2033 will accomplish nothing for people turning 75. Same for people turning 73 or 74 in 2033 – they too will have been forced to start RMDs in 2031 and 2032 respectively. Surely this was not the intent of the Act. What's the best way to ask Congress to fix this?
hello Miss Hatch , wow wow "Employer contribution for student loan ????? Is this only for government employee or it dose include private sector who may match 401 k ??? and how much government will match ? is there a limit for matching ? like if am paying 492 $ per month , the government matches 492 $ per month ?
Happy New Year Debbie! Thank you for sharing your knowledge 🙂
Debbie, glad you're back! Great videos. Could you talk about sick leave and how it computes to your retirement balance regarding adding to your retirement as I'll be retiring in 2 years. Thank you!
Debbie: at the 13:03 minute mark you are done with RMD talk. You confused me. Is the Roth TSP going to be treated just as the Roth 401(K) now after Secure 2.0 whereby they will not be subject to minimum RMD's ?
Hello Debbie,
You mentioned that COLA is not included if you retire under 62. Is this permanent if I retire MRA +20 @ 60 or does COLA kick in when I hit age 62?