Secure Act 2.0 is the most recent amendment to the Secure Act of 2019, and it promises to have a major impact on retirement planning. This new legislation contains a long list of provisions and changes, but we’ve identified a short list that will impact many people preparing for retirement.  In this episode, we’ll take you through those four changes and explain how they might affect your financial future.

RMD Age Changes Under Secure Act 2.0

One of the most significant changes is to the Required Minimum Distribution (RMD) age. After the age moved from 70.5 to 72 in 2020, this new Secure Act 2.0 increases the RMD age from 72 to 73 immediately and eventually to 75. This change provides individuals with more time to maximize their retirement savings and receive those tax-advantaged returns, and it creates some additional planning opportunities when withdrawing money.

Catch-Up Contributions Expanded

Another key piece of legislation in the Secure Act 2.0 is catch-up contributions. For anyone over 50, retirement account catch-up contributions will be $7,500 in 2023. But for anyone between 60-63, beginning in the year 2025, they can make catch-up contributions of $10,000. 

New Flexibility: 529 Plan to Roth IRA Transfers

Beyond those two, we wanted to highlight a couple more that were really interesting because they were a bit unexpected. The first is the opportunity to move money from a 529 plan to a Roth IRA. There are restrictions associated with this, but it will give retirees more control over their money and give you the chance to take advantage of the tax benefits even if the money isn’t used for education.

Student Loan Payments Counting Toward Company Matches

And the last change we discussed on the show deals covers company matches to retirement accounts. This one will benefit younger savers who struggle with contributing to a 401(k) because of sizable student loan payments. Now, making your student loan payments can count as retirement account contributions for the purposes of getting the company’s 401(k) match. So if your company requires a $300 contribution to qualify for the match, making a student loan payment of that amount will satisfy the requirement. 

Other Secure Act 2.0 Provisions

Secure Act 2.0 contains a host of other changes, but these four represent some of the most impactful changes that are likely to be seen in retirement planning. We’re excited to see how all the amendments and additions will shape up your financial future! 

And as always, it’s important that you consult with a qualified CFP to ensure you’re taking advantage of all the opportunities available to you.  If you have any questions or would like more information, start by taking advantage of our Money Map review. 

Here are a few of the things we discuss in this episode:

• 1:15 – RMD age pushed back again to 73 and eventually 75.
• 3:09 – Special catch-up contribution
• 4:31 – Opportunity to move money from a 529 to a Roth
• 6:27 – Getting a company match by paying off student loans
• 10:24 – CEO’s Corner with Joel Johnson on early retirement
• 17:11 – A Women’s Word with Heather Atkins