By Karen Davis, EA, MBA, PhD

The “Setting Every Community Up for Retirement Enhancement Act of 2020” (SECURE Act) made two significant retirement plan changes starting in 2020 – increasing the age for required minimum distributions from 70½ to 72, and creating a 10-year distribution rule for most beneficiaries.

A second major piece of retirement legislation, dubbed SECURE 2.0, was passed on a broadly bipartisan basis and signed into law on December 29, 2022.

SECURE 2.0 provides individual and business incentives to promote retirement savings at all stages of a worker’s life cycle, including:

  • rolling over unused §529 educational savings plan balances into Roth IRAs
  • expanding retirement plan eligibility to include more part-time workers
  • increasing incentives for employers to establish and contribute to employee retirement plans
  • automatic enrollment in employer-sponsored plans
  • permitting employer matching contributions to be made with respect to employees’ student loan repayments
  • increasing options for Roth components within employer-sponsored plans
  • allowing greater flexibility for emergency distributions, along with an expanded timetable allowing recontribution of these distributions
  • lowering the age for penalty-free withdrawals for certain qualified public safety employees
  • increasing amounts for catch-up contributions in one’s early 60’s
  • further delaying the age at which a person must begin taking RMDs – to 73 starting in 2023, then to age 75 a decade later
  • increasing amounts within IRAs that can be allocated to qualified longevity annuity contracts.

In all, there were 92 new provisions.

During my Fall Fest Accounting Conference session in November, we’ll dig into the 50 or so provisions that will most impact your clients.

I look forward to seeing you there!