Secure Act 2.0: Key Changes for 2023
By Kerry Anderson, Anderson Wealth & Retirement
After months of debate, Congress finally passed some major changes to retirement laws at the end of 2022.1 The Setting Every Community Up for Retirement Enhancement (SECURE) Act 2.0 changes are numerous, complex, and will roll out over several years. For now, let’s focus on some key changes for 2023.2
The age at which required minimum distributions (RMDs) begin has increased to age 73 in 2023. This change impacts folks born between 1951
and 1959.The penalty for missing all or part of an RMD decreased to 25% in 2023. However, if you correct the past due RMD and pay taxes on it within two years, the penalty drops to 10%.3
Qualified Charitable Distributions have a few more options. Starting in 2023, folks who are age 70½ or older can gift a one-time amount of $50,000 (adjusted for annual inflation) to a charitable remainder unitrust (CRUT), charitable remainder annuity trust (CRAT), or charitable gift annuity (CGA).4
More folks can take early distributions from their retirement accounts without penalty. Starting in 2023, victims of disasters and folks who are terminally ill will be able to access their retirement accounts early without incurring a 10% penalty.5 There's plenty of fine print, so let's have a conversation if you think you might be eligible.
Bottom line: There’s A LOT to unpack in the new laws. As we’ve learned with previous new regulations, Congress might enact new laws, but we often must wait for the IRS and other agencies to catch up before we can fully make use of them.
Stay tuned for updates as the new rules shake out.
Kerry Anderson, Owner, Anderson Wealth & Retirement
Kerry Anderson, the owner of Anderson Wealth & Retirement in Lincoln, NE, has over 30 years of experience in the financial services industry. For more information, Mr. Anderson can be contacted at 402-265-5753 or at andersonwealthgroup.com.
Kerry Anderson offers products and services using the following business names: Anderson Wealth & Retirement – insurance and financial services | Ameritas Investment Company, LLC (AIC), Member FINRA/SIPC – securities and investments | AIC is not affiliated with Anderson Wealth & Retirement. Representatives of AIC do not provide tax or legal advice. Consult your tax advisor or attorney regarding your situation.
Sources: 1 https://www.plansponsor.com/official-secure-2-0-law/
2 https://www.fidelity.com/learning-center/personal-finance/secure-act-2 3 https://www.kiplinger.com/retirement/new-rmd-rules 4 https://www.fidelitycharitable.org/articles/secure-act-2-0-retirement-provisions.html 5 https://www.jdsupra.com/legalnews/secure-2-0-changes-rules-for-retirement-9979502/