First Look at The Secure Act 2.0: NEW Retirement Planning Strategies

In this episode, you’ll learn four key pieces of information from Secure Act 2.0 and how they are beneficial to you right now, including a significant update to the new IRA Beneficiary rule from Secure Act 1.0.  The changes made in this new law greatly impact how you should plan for retirement, so through this episode, I will give you tips on how best to utilize these new laws to your benefit.  

The four key pieces from the Secure Act 2.0:

1. The new RMD (Required Minimum Distributions) age is increasing from 72 to 73 as of 2023 and will change again in 2033 to age 75.  
2. New Option for Surviving Spouse’s Beneficiary of an IRA. This new law now allows the surviving spouse, if younger, to make a non-revocable election to retain funds.  This would allow the surviving spouse to take RMDs based on their age going forward. 
3. Employer Sponsored Plan updates. This part of the new law will affect how an employer may help its employee with their 401(k) by matching what they pay in their student loan payments. The other part is now your employer may allow you to take up to four penalty-free withdrawals from their sponsored Roth plan for emergencies. 
4. Update to the 10-Year Rule for Beneficiary IRA. In Secure Act 1.0 congress changed the rule for beneficiary withdrawal to be completed within a ten-year window, but not requiring any to be withdrawn within the first nine years. Secure Act 2.0 is looking at changing this to require minimum withdrawals within the first nine years.  There are planning issues with this if you inherited an IRA between now and the first day of 2020; therefore, this rule of the law may change again.  

There will be more information coming over the next several months as we continue to unpack this 4,000-page piece of legislation, and how it will affect you and your retirement strategy.  As always, talk with your financial advisor to help you understand the implications and decisions you can make for your retirement.  

In this episode, you’ll also hear:

• Pro tips about how to make the best use of the new Required Minimum Distribution
• There’s no required timeline in which employers must adopt these provisions of Secure Act 2.0 into their qualified plans
• Planning strategies to help make the best use of the changes from Secure Act 2.0

If interested in learning more now about the Secure Act, here is a link to a youtube video by Dave Ramsey where he quickly breaks down the Secure Act:  https://www.youtube.com/watch?v=ZZP0MiI2lRcLooked"

Must-listen Moments: 

[00:06:16] Pro-tip number one is when you are first required to take your minimum distribution…you are actually not required to take your minimum distribution until April 1st the following year. 

[00:09:16] When we’re making contributions…if you only have enough funds to contribute to one of the two spouses, you should be earmarking the money towards favoring the younger of the two spouses. 

[00:14:09] It’s really important to have an emergency savings account…I think Congress is addressing the importance of us being able to have access to some money that’s going into qualified plans to encourage us to save more. 

[00:16:55] In theory, they wanted you to take a tenth … every year and equally distribute the money yourself over the time period.  But, as we know from the work we did on our episode on biases, we do not like to take money out of IRAs and pay taxes. 

Other episodes mentioned during this episode:

The Four Phases of your Financial Journey - Watch here https://youtu.be/_1YDlVnqNkw or listen here https://link.chtbl.com/RTR-Ep7

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Connect with Danette:

E-mail: [email protected]

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https://www.linkedin.com/in/danette-lowe-cfp%C2%AE-9b7bb716/

Visit www.trunorthwealth.com to Download your free workbook - Three Steps to Planning an Epic Retirement 

This podcast is for informational purposes only. The situations used herein do not constitute a recommendation as to the suitability of any investment for any person or persons having circumstances similar to those portrayed, and a financial advisor should be consulted for your specific situation. Neither Commonwealth Financial Network nor your representative provides tax advice.