More retirement changes are here, as the Secure Act 2.0 passed Congress in the waning days of 2022, almost three years to the day after version 1.0 of the Act became law. Most of us harbor enough cynicism where the government is concerned to expect little in the way of “purpose-built” legislation, so it might come as a surprise that the Secure Act 2.0, like its predecessor, addresses a boatload of important aspects of our collective retirements that no doubt needed to be examined. But don’t worry. We won’t go through all 90,000 new laws because we’d be here for hours, but we are examining the heavy hitters that impact most people.
What might come as less of a surprise is the sometimes-incomprehensible rationale and language the Act’s provisions contain — both so arcane that Richard himself jokes the Act should be referred to as the “CPA Full Employment Act” because it requires so much professional interpretation.
But why the need for this legislation in the first place? For starters, the very nature of retirement continues to change over time. We’re not only living longer, but most of us are also retaining a better level of vitality in our later years. Which makes sense, right?! So, what exactly are we looking at? Well, for starters, Required Minimum Distributions (RMDs) are bumping up the age for withdrawal to 73, and in another ten years, it will be increased again to 75. Other updates include changes to the size of catch-up contributions for older working Americans as well as some changes meant to help younger people save while paying off student debt. And then we get into some real doozies, like new laws that let you take money out of your retirement account penalty-free. And let’s just say that the rules are so loose you could claim a hangnail to get your money.
So, with all that said, join us for the latest episode of A Place of Possibility as Richard Del Monte and Angela Wright take a close look at Secure Act 2.0. They’ll review its provisions and break down its often-byzantine wording in to terms we can all understand. We’re confident that you’ll find their explanation not only very valuable but also very entertaining.
In addition to the talking points mentioned above, Richard and Angela will also touch on:
- How the Secure Act 2.0 addresses the balance of our increased life expectancy with RMD requirements and will continue to do so in the future
- An important change to Roth 401ks that will put them on a more even footing with Roth IRAs as far as RMDs are concerned
- How some catch-up provisions for retirement accounts have been increased pretty much across the board — with one understandable caveat for high earners.
- A variety of Secure Act 2.0 changes that make it less painful to pull from your retirement plan before turning 59.5. Some of these changes might even lead you to think that a government conspiracy is afoot to keep you working well into your later years.
- Provisions that will provide much-needed lifelines to domestic abuse victims and those suffering a terminal illness.
Strap in, folks, because this is an information-packed episode, and we don’t want you to miss any updates you might need to make. And if you know someone else who might benefit, we hope you’ll pass this show along!
P.S. Looking to meet with Richard or Angela at our office in Alamo, Ca? Want to discuss more of what you heard in this episode? Wondering where the heck you need to get started or what all of this means for your retirement plans? Scheduled free 30-minute session and find the peace of mind you deserve for the rest of your life. You can also reach by calling 925.736.6410 or send an email to Info@APlaceOfPossibility.com.
“There are a ton of provisions in here regarding retirement accounts, and they impact your Regular Joe. Everyone who is listening today is probably impacted by this. So, we’re going to give you the highlights — the things that we think you need to know about. This Act is HUGE!”
We’re proud to present you with our “Know Your Possibilities Guide,” a tool and free resource for you to take notes, review, keep on hand, or even share with your friends and family. So, grab your copy, click the play button and follow along. You’re just minutes away from discovering your next Place of Possibility.
A Glance at this Episode:
0:42 Before we get started, here are a few things you should know about the current buzz over the debt ceiling standoff.
2:23 Genuinely concerned and want to change how Congress handles the debt ceiling? Check out FixTheDebt.org – a great bipartisan site where you can learn about what’s going on and how you can help.
3:44 The Secure Act 2.0 was passed at the very end of 2022. Here’s a brief overview of the Act.
4:31 The minimum age for Required Minimum Distributions (RMDs) has been increasing to account for our longer life expectancy. Now, they bumped it up to 73, and by 2033 it will be up to 75.
6:06 This Secure Act 2.0 change will be welcome news for listeners who have Roth 401k accounts – You will no longer have to take RMDs! But there are a few exceptions.
7:10 If you currently have a Simple IRA or a SEP-IRA, you can now have Roth contributions – for the first time ever!
8:12 This new provision expands how employers handle their employee-matching contributions. Allowing them to do it Roth style means you have to pay the tax today.
9:33 We’re not sure who’s back Congress is trying to scratch with this one, but if you’re over 50 and made over $145,000 at your same employer, your catch-up contribution has to be Roth – no tax savings here.
12:31 In 2025, if you’re between the ages of 60 and 63, you’ll be able to add more catch-up funds to your retirement account. It increases to the greater of $10,000 or 150% of their regular catch-up contribution. We DARE the IRS to track this one.
14:26 These provisions in the Act will allow you to pull money out of your retirement account before you’re 59.5 years old without penalty.
18:45 Live in a Federal disaster zone? Maybe anywhere in California? Now you can take $22,000 from your IRA penalty-free and have three years to pay it back.
21:07 On a more somber note, anyone facing a terminal illness can now pull money out if they have up to seven years to live.
21:49 Victims of an abusive relationship also have an exception to get up to $10,000 out of their retirement account, and you have up to a year after the episode of abuse happened to get the money out.
22:35 We don’t recommend long-term healthcare policies, but if you have one and want to keep it, this provision may come in handy.
23:40 Another unusually broad authorization allows you to withdraw for “necessary personal or family emergency expense,” but only up to $1,000.
24:52 Secure Act 2.0 establishes, now as a law, that employers can use payroll deductions to fund emergency saving accounts for lower-paid employees.
26:23 A well-publicized aspect of the Act will allow you to now roll over your 529 college savings plan account into a Roth, BUT there are a lot of asterisks here.
30:09 Forgot to take a Required Minimum Distribution on your retirement account? Congress is showing some sympathy, but its methodology for lessening this penalty may confuse you. Word to the wise, get the help of a qualified CPA before you do ANYTHING!
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Links/Resources Mentioned in this Episode:
- Stand!, located In Concord, CA, is a local resource for victims of domestic abuse. They can be reached at:
- For more information about the debit ceiling, visit FixTheDebt.org.
- To open a Health Savings Account as suggested in this episode, go to https://livelyme.com/partners/how-to-open-an-hsa.
- Ensure your family’s wealth will live on for generations to come. Order your copy of Endless Inheritance by Richard Del Monte today! https://aplaceofpossibility.com/endlessinheritance
- Ready to become a better investor? We’ve got the strategies you need. Download a FREE copy of our e-book, “Evidence-Based Investment Insights.” https://mailchi.mp/aplaceofpossibility/dmgevidencedbasedinsights
- Del Monte Group offers a variety of free resources to help you make innovative and educated financial decisions so that you can keep, grow, and enjoy your wealth starting now. Find them by visiting https://aplaceofpossibility.com/resources“One-size-fits-all” won’t fit you here! The Del Monte Group team understands that everyone’s financial goals are unique. That’s why we always provide customized advice. No matter where you are in life, you can depend on our proven expertise to provide financial planning support for long-term success. Ready to get started? Schedule a meeting with Richard or Angela in our Alamo, CA based office today or we can meet via Zoom! >> You can select a date and time that works for you via our calendar, call us at 925.736.6410, or send an email to Info@APlaceOfPossibility.com. We can’t wait to help you!