Congress passed the new SECURE Act 2.0 in late December, and while it contains many updates that affect retirement savers, there are two changes in particular that you will want to be aware of right away. Watch this Instablog as Russ explains what they are.
Topics Discussed:
SECURE Act 2.0
Changes to RMDs
Changes to 529 Plans
You can watch this video and others on the Voice Wealth Management YouTube channel.
Transcript
Hi, I'm Russell Rivera, founder and president of Voice Wealth Management. And welcome back to our Insta blog series. First of all, I want to say Happy New Year to everybody. I don't know when you're going to be watching this. But nonetheless, it's probably the first time I'm speaking to you. So I wanted to say Happy New Year. So many times, I always wonder how long it's okay to say that to somebody. I've had people say that to me in February or March. And it's seems like, that's kind of weird. But it is the first time I'm talking to you. So whenever you're watching this, it's probably appropriate. With that, it is 2023 now. And a couple of right before Christmas, Congress passed the omnibus spending package. And it contained something called Secure act 2.0. There have been a couple of major changes to the tax code and retirement planning in terms of the tax code over the last several years. You had the tax cuts and Jobs Act in 2017, you had the secure act in 2019. And now you have this. So what does this mean? What are the most immediate things one can think of? Well, the first is, if you are a parent or a family member, was supposed is turning 72 in 2023. In other words, born in 1951, they are not required to take required minimum distributions from their IRA, or 401K plan this year. That is new. So if somebody was 72, in 2022, they had to take them. Now, they don't, not until 2024, will they be required to do so. And for others who are older than that, that age will eventually become 75. The second thing, which is interesting, and maybe has generated some controversy is for those who have 529 plans for their kids, or grandkids or whatever. Those funds in limited circumstances and subject to a ton of different conditions can now be you moved from a 529 for college expenses to a Roth IRA for those kids, starting in 2024. So, again, there are tons of conditions. Tons of you know, things that have to happen before you can do that. And there's money to monetary limit. But again, that can happen over time. And that starts in 2024. And for those people who are thinking about whether and how to fund 529 plans, this is an additional interesting sort of wrinkle that can go into it. Because again, the Roth IRA goes to the kids, not to the people who are funding the money, so that's unique and different. So with that, there are other things that I'm sure we'll cover in future videos, and because most of them are not taking place until 2024 or later, and a couple of things are still subject to edit, and correction. But with that, we're going to end the video here. Again, Happy New Year. Thanks for watching, and we'll see you next time.
Russell D. Rivera, CFA, CFP® is the Founder and President of Voice Wealth Management (Voice) in New York, NY. He also likes to think of himself as a Personal CFO and Financial “Therapist” for entrepreneurs, young professionals, and their families. He helps clients make prudent financial decisions regarding spending, saving, investing, and planning while giving a voice to the individual client's financial priorities and experiences.