Created: April 24, 2023
Modified: April 21, 2023

Episode 92: How has SECURE 2.0 Changed the Rules for Required Minimum Distributions?

Today’s question is, “how has SECURE 2.0 changed the rules for required minimum distributions?”.

If you have not heard, there were some pretty big legislations that were passed at the very end of December 2022 that affect retirement accounts. In this case, there are a few changes for required minimum distributions (RMDs).

Age You’re Required to Withdrawal

The first thing is age. It used to be that you were required at age 70 ½ to start taking money out of retirement accounts. In the last few years, that changed to start in the year in which you turn age 72. That has since been pushed to age 73. Down the road, starting in 2033, that age bumps up even more to age 75.

Penalties Decreased

Number two is the penalty. If you are supposed to take a required minimum distribution but fail to do so, there has been customarily a penalty of 50% of the amount that you should have taken. So, if you were supposed to take a RMD of $6,000 and you did not do it, the penalty would be $3,000. Ouch. Now, that penalty has not been eliminated, but at least it’s been reduced to 25% of the amount that you should have taken.

Roth 401(K) Balances

The other big change relates to whether you have Roth 401(K) balances inside of your 401(K). Customarily, when you have a 401(K), even if there’s a blend of pre-tax balances and Roth balances inside, the RMD was mathematically assessed on the entire account. So, that’s a little bit of a change. They’re actually going to carve that Roth 401(K) balance out of that account and mathematically, you do not have to take a required minimum distribution on that, which is kind of a good change.

  • Sandy and Thomas C.
    Sandy & Thomas C. are clients of Johnson Brunetti and received no compensation for their statement.

    “We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”

  • Lisa D.
    Lisa D. is a client of Johnson Brunetti and received no compensation for her statement.

    “Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”

  • Ken D.
    Ken D. is a client of Johnson Brunetti and received no compensation for his statement.

    “I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “

  • Jeanne P.
    Jeanne P. is a client of Johnson Brunetti and received no compensation for her statement.

    “Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”

  • Anonymous
    This testimonial was provided by a client of Johnson Brunetti and received no compensation for their statement.

    “I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”

Our Locations
Johnson Brunetti
Welcome to Our New Website!
Everything was designed with you in mind, making our retirement planning resources more easily accessible to you.
Check out your new resource center, where everything can be organized by article type or topic
Are you ready to speak with a financial advisor?
Johnson Brunetti

Investment Advisory Services offered through JB Capital, LLC.
Insurance Products offered through JN Financial, LLC.
Atlanta • Boston • Hartford | Tel: 800-208-7233

JB Capital LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.

JB Capital's Form ADV | Disclaimer | Privacy Notice | Client Relationship Summary

*Information about our Affiliation with the UConn Huskies

Johnson Brunetti is a sponsor of WFSB Better Money, WCVB Better Money Boston, WSB-TV Better Money Atlanta, WTNH Money Wisdom, and WTIC Money Wisdom.