4 Law Changes that May Affect You - SECURE ACT 2.0 [video]

/ Planning Within Reach/

transcript

Here’s what you need to know about The SECURE Act 2.0 - some of the highlights.

#1 - Catch-up contributions have increased.

For people ages 60 to 63, the contribution limit now is $10,000 versus $7,500. This is starting in 2025. For people making over $145,000, all of your catch up contributions need to be Roth.

#2 - RMD ages have been pushed back.

It was age 72. It is now age 73. And starting in 2033, the RMD age is now 75. This just gives you more opportunity to do more Roth conversions before those RMDs begin.

#3 - Qualified Roth 401ks no longer have the RMD requirement starting in 2024.

Roth IRA's don't have the RMD requirement. Qualified Roth 401ks did. That was confusing. People were doing rollovers of Roth 401ks to Roth IRAs just to avoid the RMD requirement. You no longer have to do this.

#4 - Unused 529 money can now be rolled into a Roth IRA (starting in 2024), but there are some requirements.

  • The 529 account beneficiary has to be the same as the Roth IRA owner.

  • The 529 account must be at least 15 years old.

  • The annual limit is limited to the IRA contribution limit for the year, minus any contributions you've already made.

  • The lifetime limit is $35,000 per beneficiary, and

  • Contributions made in the last 5 years will be ineligible to do a Roth conversion.

Here are some of the highlights. Reach out to your Advisor to make sure that you're taking advantage of any planning opportunities that may have arisen with this law change. My name is Linda Rogers, Owner of Planning Within Reach.

Linda Rogers, CFP®, EA, MSBA is the owner and founder of Planning Within Reach, LLC (PWR). Originally from New Jersey, Linda services clients throughout San Diego county and nationwide. She leads the design of PWR's investment portfolios which utilize broad, low-cost investments that integrate environmentally, socially, and governance (ESG) factors.

Planning Within Reach, LLC (PWR) is a fee-only and fiduciary wealth management firm offering one-time comprehensive financial planning, ongoing impact-focused investment management and tax preparation services in San Diego and nationwide. PWR is a woman-owned firm that specializes in busy professionals and impact investors. Planning Within Reach, LLC and their advisors do not receive commissions and do not hold any insurance licenses or brokerage relationships.