Our Blog

The Secure Act 2.0

Here is what you need to know about the Secure Act 2.0, RMDs, and how you could be affected.

Changes to Age Requirements

The Secure Act 2.0 raises the age again, after the original Secure Act of 2019 raised the age, that retirees are required to take RMDs (required minimum distributions.) Starting January 1, 2023, you may now wait until 73 as opposed to the previous age of 72. The age will increase again in 2033 to 75.

Why does this matter?

This increases the amount of time you get to take advantage of the tax benefits IRAs offer.

Changes to Penalties
Additionally, the penalties associated with not taking the RMDs is decreasing from 50% to 25% of what should have been withdrawn. And there is now a ‘correction window’. So, if you make a correction within the allowed time frame, the penalty decreases further to only 10%.

Changes to ROTH IRAs
This change eliminates the need to take RMDs from ROTH IRAs from certain qualified employers. This does not affect everyone, however, so if you have a ROTH IRA, let’s talk and see if you are impacted by this change.

Changes to Catch-up Contributions

For people aged 60-63, the ‘catch-up’ contribution limit on 401(k)s and 403(b)s will increase from $7,500 annually to $10,000 annually beginning in 2025. For those 50 and older who have IRAs, the catch-up contribution limit (currently at $1,000 annually) will be indexed based on inflation. Translation: As cost-of-living increases, your contribution limit could increase as well.

This just scratches the surface of what you need to know, and it should be noted that these are simplified explanations to complicated laws. So, if you have questions on this, or anything else related to your finances, retirement, or laws, please don’t hesitate to reach out, we are happy to help!

Call us today to see how the changes affect you, your investments, and your retirement, (503)257-0057.

Source: Bill Good Marketing, Accessed 3/22/23

 

Back

DISCLOSURE: Investment advisory services are offered through Gretchen Stangier, Inc. DBA Stangier Wealth Management (“Stangier Wealth Management”), an investment advisor registered with the U.S. Securities and Exchange Commission. Stangier Wealth Management only offers investment advisory services where it is appropriately registered or exempt from registration and only after clients have entered into an investment advisory agreement confirming the terms of engagement and have been provided copies of the firm’s ADV Part 2A brochure and Part 3 documents.

DISCLAIMER: This website is for informational purposes only and does not constitute a complete description of our investment services or performance. This website is in no way a solicitation or offer to sell securities or investment advisory services except, where applicable, in states where we are registered or where an exemption or exclusion from such registration exists. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY ‘LINKED’ WEBSITE.

You may also like

How Your Savings Account Can Become Your Retirement Redeemer

Many news stories and advisors lately seem to focus investment strategies as a surefire way for people to gain extra…

Eating the Estate Planning Elephant… One Bite at a Time, Part I

No one wants to look at it, no one even wants to think about it, yet there it looms —…

Eating the Estate Planning Elephant… One Bite at a Time, Part II

You may have been cohabitating with your proverbial estate planning elephant for some time now, but if the first part…