We are in our second year of the SECURE Act 2.0, passed at the end of December 2022, and the opportunities and confusion continue. Below is a summary of the key provisions:

Reminder of required minimum distribution (RMD) ages:

• RMD is age 73 if born 1951–1959
• RMD is age 72 (or 70½) if born 1950 or earlier

Highlights of SECURE ACT 2.0 provisions effective as of 2024:

• Up to $35,000 of assets in a 529 Plan maintained for at least 15 years for a designated beneficiary can be rolled over tax-free to a Roth IRA for the beneficiary.
• The QCD limit has been indexed for inflation and has increased to $105,000.
• Participants in Roth employer accounts do not need to take required minimum distributions, which puts all Roth accounts on an even playing field.
• Surviving spouses can delay taking RMDs until the age when their deceased spouses would have been required to start taking RMDs.
• Employer contributions made on behalf of employees for “qualified student loan payments” are treated as matching contributions for 401(k)s, 403(b)s, SIMPLE IRAs and governmental 457(b) plans.
• Employee plan sponsors can enact emergency savings accounts for individuals who can make Roth contributions on an after-tax basis to the savings account up to $2,500.
• Individuals are allowed one penalty-free withdrawal of up to $1,000 per year from IRAs or 401(k)s for unforeseen or immediate financial needs relating to personal or familial emergency expenses.
• The $1,000 IRA catch-up contribution for people age 50 and above will be indexed for inflation.
• For SIMPLE IRAs, the annual deferral limit and the catch-up contribution limit at age 50 are increased to 110% of the 2024 plan limit (as indexed).
• Penalty-free early withdrawals of the lesser of $10,000 or 50% of the employee’s vested account under the plan are permitted in cases of domestic abuse.

Watch our social media for more information on these items. If you would like to learn more about how these updates might impact you, reach out to our office-                                      

Philip: plockwood@parklandrep.com  or  Lauren:  Lrash@parklandrep.com

This article is provided for informational purposes only and should not be construed as tax advice. Consult your tax professional.

Sources: Horsesmouth.com, IRS.gov

Philip Lockwood | Founder + Managing Partner

Address | 1501 Ingersoll Ave Ste 201 Des Moines, IA 50309

Phone | 515-274-8006

Email | plockwood@parklandrep.com

Website | Lockwoodfinancialstrategies.com

Securities offered through Parkland Securities, LLC, member FINRA (FINRA.org) and SIPC (SIPC.org). Investment Advisory services offered through SPC, a Registered Investment Advisor. Lockwood Financial Strategies, LLC is independent of Parkland Securities, LLC and SPC

Securities offered through Parkland Securities, LLC, member FINRA/SIPC.