Secure 2.0 Act

by | Mar 28, 2024 | Videos

Secure 2.0 Act

In this video, Tom attempts to briefly highlight nine points from the Secure 2.0 Act in four minutes or less!
1.  RMD changes
2.  Larger catch-up provisions
3.  Roth @ work – can be matched
4.  Qualified Charitable Distributions can now include $50k to a charitable annuity trust
5.  Qualified LIfetime Annuities expanded from $145,000 to $200,000
6.  Auto-enrollment and auto-portability
7.  Emergency Savings accounts, a nice addition!
8.  Student Loan payments – matching payments?
9.  Changes to 529 plans

Secure 2.0 Act – Links

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Secure 2.0 Act – Transcript

We’ve got nine points that we want talk about from the Secure 2.0 bill.

We’re going to try and do this in four minutes or less.
Time me!

Welcome to episode 374 (a)!
Start the clock!

Secure 2.0 Act – the 9 highlights that you need to know.

First. RMDs are going up – from beginning at age 72, now they’re 73.
In ten years, in 2033, that minimum age is going to start at 75.
So we’ve got more time to do this.

The penalty used to be, if you missed taking an RMD, it used to be 50%.
Now it’s 25%.

Also one other change that they made was if you have a Roth account, as part of your retirement plan at work — this is NOT a Roth IRA.

If you have a Roth retirement account, you used to be subject to RMDs. Which was kind of stupid.
But that has now been eliminated.

Second thing that you need to know about Secure 2.0: they have this “window” now – if you’re between the ages of 60 and 63, you can now use a a greater catch-up provision. Where you can now put $10,000 per year — instead of $7500.

That’s a nice little kicker that is out there.

Also, if you make more than $145,000 in a year, the excess has to go into a Roth account – not a pretax account.

Point number 3 about Secure 2.0: if you have a Roth account, as part of your 401k – a Roth account at work. Again, not a Roth IRA.

Companies and employers can now make matching contributions to Roth workplace retirement plans.
That never existed before.

Point number 4 about Secure 2.0: and this is kind of whopper, if you know what I’m talking about.
Qualified Charitable Distributions — where you can take $100,000 from your retirement account — instead of taking a required minimum distribution.
You can take a hundred grand and send it to your favorite charity.

Now, under Secure 2.0 can take up to $50,000 and contribute that into a charitable remainder annuity trust.

That’s a huge deal.

We’re going to make a separate video on this.

Point 5 about Secure 2.0: Qualified Lifetime Annuity Contracts inside of retirement accounts.

They’ve been expanded to $200,000 now. It used to be $145,000 per year.

Point 6 about Secure 2.0: auto enrollment now in retirement plans is kind of the law of the land.

They start at a minimum of 3% of your pay would go automatically into a retirement plan.

They also expanded something called “auto-portability,” so when you leave a job, you can automatically take this money and roll it over into your new workplace 401k.

That’s not really new. But they’ve now made it a lot easier to do that.

What a lot of people do — more than 50% — is if you’ve got a small balance in a 401k, and you leave that job. And you start a new job — a lot of people take it out and they will go on a cruise. Or they’ll spend it on a vacation. Or something like that.

The money gets spent. It doesn’t get rolled over.

Point number 7 about Secure 2.0 and this is really cool — because we talked about this in podcast #14, many years ago:

Defined contribution plans at work can now set up an “emergency savings plan” for participants.

It’s set up as a Roth retirement account. You can contribute up to $2500. per year.

You’re allowed to take up to four distributions per year. When you do that, the first four withdrawals, are penalty free, and tax free.

It’s actually a really good way to have some kind of emergency fund — which most Americans do not have.

Point 8 about Secure 2.0: Student loans.

Employers can now make matching student loan payments. How cool is that?

They can – also match it – with retirement plan contributions. So they can get people to pay their student loans AND save for retirement.

Someone has their thinking cap on!
That’s a really good one!

The last one I’ll mention is 529 accounts.

Now you can take – after 15 years – you can roll this money into a Roth IRA.
So you don’t have to take it out.

Suppose you start a Roth IRA for someone who’s 9 years old.
After fifteen years if they haven’t used it, or don’t need it, they’re 24 years old.

They can take that money — up to $35,000 — and roll it into a Roth IRA. Really cool.

Okay, that wraps up the nine points from Secure 2.0 Act, you need to know.

It wasn’t exactly four minutes. I went a little over because there’s a lot of important stuff you need to know.

If you’ve got questions — get in touch with us!
We’d be happy to talk to you.

That’s episode 374 (a).
Thanks for tuning in.


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