Video: SECURE Act 2.0 – New Changes to the Retirement Savings System

Just as the clock ran out on 2022, Congress made significant changes to retirement savings rules and programs when it passed the SECURE Act 2.0 as part of the fiscal year 2023 Appropriations bill. Here are the top changes that clients should be aware of:

• The age for starting required minimum distributions (RMD) is now 73. If you are turning age 72 in 2023, you will not have an RMD until 2024. The bill also states that the RMD starting age will rise to 75 by 2033.
• Catch-up contributions for savers over 50 are now indexed to inflation, with the number increasing each year based on cost-of-living adjustments. Beginning in 2025, workers aged 60 to 63 will be able to contribute an additional $10,000  per year in most employer-sponsored plans.
• The $100,000 qualified charitable distribution (QCD) limit will be indexed for inflation beginning this year.
• Beneficiaries of 529 plans that contain unused qualified education expense funds will be able to roll over a lifetime limit of $35,000 to a Roth IRA, subject to certain requirements and restrictions.
• There is now a 100% tax credit for small businesses that create retirement plans.

To review a more in-depth analysis of the new rules and regulations, please watch the recording of our January 2023 virtual event with Schwab’s Hayden Adams, CPA, CFP®.