SECURE 2.0 Resources

Here is the bill text for SECURE 2.0.

SECURE 2.0 Big Picture

SECURE 2.0 tinkers, almost in an unprecedented fashion. Instead of repealing obviously bad retirement tax rules, it adds to them! I suspect that for many Americans, SECURE 2.0 will have only a marginal impact on their retirement savings and financial planning. This version of SECURE 2.0 has some aspects of what the House passed much earlier in 2022, but there are many significant additions and changes.

I discuss what I believe to be the two biggest problems with SECURE 2.0

Some Highlights (or Lowlights)

  • Increased catch-up contributions for those aged 60-63, effective starting in 2025
  • Denial of catch-up contribution deduction for those with prior-year income over $145,000, effective starting in 2024
  • Delay RMDs to age 73 for a decade, then delayed to age 75. This change is effective starting in 2023.
  • Increased auto-enrollment for workplace retirement plans
  • Roth options for (i) SIMPLE IRAs, (ii) SEP IRAs, (iii) employer contributions to employer plans such as 401(k)s
  • Minor emergency withdrawals from retirement accounts. Limited to one distribution per year of no more than $1,000, effective starting in 2024
  • $2,500 of contributions to emergency side accounts for workplace retirement plans, effective starting in 2024
  • Elimination of RMDs from Roth 401(k)s during the owner’s lifetime
  • Allowing Schedule C self-employed individuals to adopt a Solo 401(k) after year-end and make employee contributions (first year only), effective starting with the 2023 plan year
  • Indexing for inflation of the $1,000 annual catch-up contribution to traditional IRAs and Roth IRAs
  • Reform to penalties for missed RMDs
  • No change to the Backdoor Roth IRA rules and no change to the Mega Backdoor Roth IRA rules
  • Expansion of the exceptions to the 10% early withdrawal penalty

Resources

Bill text

Jeffrey Levine’s excellent Twitter thread on the particulars of SECURE 2.0: https://twitter.com/CPAPlanner/status/1605609788183924738

Jeffrey Levine’s breakdown of SECURE 2.0 on Kitces.com: https://www.kitces.com/blog/secure-act-2-omnibus-2022-hr-2954-rmd-75-529-roth-rollover-increase-qcd-student-loan-match/

My breakdown of SECURE 2.0 and the FI Community: https://fitaxguy.com/secure-2-0-and-the-fi-community/

My mini Twitter thread on minor emergency withdrawals: https://twitter.com/SeanMoneyandTax/status/1605117417721434113

My mini Twitter thread on new employer plan emergency accounts: https://twitter.com/SeanMoneyandTax/status/1605119482803863552

My Plan

I have a retirement tax reform plan that I believe is better and simpler than SECURE 2.0.

FI Tax Guy can be your financial planner! Find out more by visiting mullaneyfinancial.com

Follow me on Twitter: @SeanMoneyandTax

This post is for entertainment and educational purposes only. It does not constitute accounting, financial, investment, legal, or tax advice. Please consult with your advisor(s) regarding your personal accounting, financial, investment, legal, and tax matters. Please also refer to the Disclaimer & Warning section found here.