In December, the President signed the SECURE 2.0 Act of 2022 (SECURE 2.0), part of the Consolidated Appropriations Act (CAA) of 2023, which builds on and expands the SECURE Act of 2019 to improve retirement-savings opportunities. Below are a few key highlights of SECURE 2.0:

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2023

Account holders of certain employer-sponsored plans, traditional IRAs, SEP, and SIMPLE IRAs are mandated to take a required minimum distribution (RMD) annually based on the account balance and the account owner’s life expectancy. The new required beginning date for RMDs is increased to 73 starting January 1, 2023, and 75 beginning in 2033.
Employers may amend their plan to allow matching and nonelective employer contributions to be designated as ROTH contributions per employee request.
New retirement plans, with less than 50 employees, can claim up to 100% of the start-up costs not to exceed $5,000. In addition, employers may claim an additional $1,000 for each employee who earns less than $100,000 and apply the credit towards a match up to $50,000.
SIMPLE and SEP Roth IRAs may accept ROTH contributions.
Individuals may now make a one-time distribution of up to $50,000 (adjusted for inflation) from an IRA to a charitable gift annuity or charitable remainder trust.

2024

401k plans part-time workers coverage enhanced from three to two years with 500 hours worked.
Force-out rollover threshold increases from $5,000 to $7,000.
Employees may request up to $1,000 from their retirement account for a personal emergency.
Penalty-free withdrawal for domestic abuse survivors up to the lesser of $10,000 or 50% of their account.
Employer’s match may be directed towards the employee’s student loan debt in lieu of their retirement account.
401k plans that allow for ROTH contributions, the catch-up contribution (50 years or older) must be a ROTH contribution if the employee earns more than $145,000. If they earn less than $145,000, it’s at the employee’s discretion.
401k and 403b ROTH accounts no longer require a minimum distribution (RMD).
SIMPLE IRAs allow additional nonelective contributions. Catch-up increased by 10%.
Establishment of a national database to locate retirement accounts (tentative completion in 2024).

2025

Employees 60 to 63-years-old may increase the catch-up contribution to $10,000. Employees earning more than $145,000 must contribute the catch-up contribution to the ROTH component.

2026

Beginning in 2026, ABLE accounts can be established for individuals who became disabled before age 46 (increased from age 26).

For more information and the personal impact on your financial planning, be sure to speak with your financial advisor.

Michele Sarna can be reached at (760) 932.0930, [email protected].

Provided as information only and should not be considered investment, tax, or legal advice or a recommendation to buy or sell any type of investments. Asset Allocation, portfolio diversification, and risk strategies cannot assure or guarantee better performance and cannot eliminate the risk of investment losses. Form ADV contains important information about Beacon Pointe Advisors, LLC, and may be viewed at adviserinfo.sec.gov