Today, we've got some exciting news to share that's set to reshape the retirement landscape as we know it. It's all about the SECURE ACT 2.0, a monumental update that sailed through Congress in December 2022, ushering in a wave of changes for retirement plans. If you haven't caught wind of this yet, don't fret – we're here to break it all down for you.

First off, this massive update, which passed in December 2022, brings over 100 changes to retirement plans. Yes, you heard that right -over 100! So, what's all the fuss about? Let's dive into the top 10 key changes:

 1. Required Minimum Distributions (RMDs): RMDs have been pushed back even further. If you were born between 1951-1959, your new start date is 73. Born in 1960 or later? You'll kick off at 75. But remember, if you turned 72 in 2022, you still need to take your RMD in 2023.

2. Lighter Penalties for Missed RMDs: The penalty for missing an RMD drops to 25% in 2023 (from 50%), and it's only 10% if you correct the mistake. Phew!

3. More Ways to Avoid the 10% Penalty: You can now tap into your retirement accounts for victims of disasters, victims of domestic abuse, and even for family emergencies, up to $1,000 per year.

 4. No RMDs on Roth Accounts: Say goodbye to RMDs on Roth 401(k)s and Roth IRAs. Enjoy the tax-free growth!

 5. New Roth SEP and Roth SIMPLE: You'll soon have Roth options for SEP and SIMPLE IRAs, making it easier to save directly in a Roth account.

 6. 529 to Roth: You can transfer 529 savings directly into a Roth IRA, under certain conditions. This could be a game-changer for college savings.

 7. Employer Match Can Now Be Roth: Employers can now match your contributions with Roth funds, giving you more tax diversification.

 8. Catch-Up Contributions Must Be Roth for High Earners:If you're considered a high earner, your catch-up contributions will need to beRoth-only, starting in 2023.

 9. Increased Catch-Up Contributions: In 2023, you can put more into IRAs and 401(k)s, with catch-up amounts gradually increasing.

10. New Inherited Account Election for Spouses: A new option allows surviving spouses to use a more favorable life table for RMDs, potentially providing more flexibility in tax planning.

These changes add both complexity and flexibility to retirement planning. While not all of them will apply to everyone, they will impact many of us in meaningful ways. And remember, these are just ten of the 100 changes coming our way, so stay tuned for more updates!

In the end, we all want a simple and trusted retirement plan, and these changes are aimed at making it even better. So, take a deep breath, stay informed, and let's navigate this new retirement landscape together.


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Ready to navigate these retirement changes with confidence? Connect with a seasoned Financial Advisor like Nick Davis, a Certified Financial Planner, in the Dallas-Fort Worth area. Whether you reside in Frisco, McKinney, Plano, Prosper, or the surrounding areas, Nick Davis is here to guide you through these financial shifts. Click here to take action!