Description

Congress’ passing of the Secure 2.0 Act at the end of 2022 provides savvy planners with many new ways to benefit from retirement savings.

Join Matt Robison and I this week as I walk through some of the changes and sprint through others to give you an overview of how this monumental piece of legislation impacts your bottom line.

1. Required Minimum Distribution (RMD) age changes - If you were born after 1960, you don’t need to worry about that until you are 75 (it used to be 70.5, this year it changes to 72 and in the next couple of years it will reach 75. Not something you need to worry about now, but it is a benefit.)
2. ROTH 401k Employer Contributions - Without getting into the weeds of the laws, the big change in the Secure Act 2.0 allows employers to contribute to an employees ROTH 401k as opposed to being restricted to only matching funds in a traditional 401K account. This strategy requires employees to pay the tax on the match up front, and allows that employer contribution to grow tax-free forever which could add up to a lot of money. 
3. 529 to Roth IRA - You can now do a one-time rollover of “extra” 529 money into your Roth IRA.  Plenty of caveats abound, but it’s a great new use of found money.
4. Honorable Mentions to be aware of in the coming months/years:

a. 401k contributions and catch-ups are increasing. As you're planning your 401K contributions, be aware of the 2023 limits, they will be increasing over time.

b. Starter 401ks for small businesses will be getting easier to implement. 

c. Student loan payments often keep people from being able to contribute to a 401k. The new law allows matching employer contributions to the 401K for folks paying down student debt. 

d. Auto enrollment for 401Ks has been expanded.

The bottom line is there are no changes that you need to make today but be aware of the Secure Act 2.0 in order to get the most out of your retirement plan.

Learn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/

Are you ready to create your ideal lifestyle?  Let’s Connect.