Welcome back to Retirement Starts Today Radio! Today we have an extra special episode for two reasons.

Today, you’ll finally meet our newest advisor, Bret Mulvaney. He joins me today to discuss the most recent legislation regarding tax and retirement planning.

This entire episode is dedicated to reviewing the Secure Act 2.0. Listen in to learn what’s changing in retirement planning and how the Secure Act 2.0 will change your retirement tax situation.

Outline of This Episode

  • [2:12] The age for RMDs is changing
  • [7:58] Qualified Charitable Distributions have not changed
  • [10:35] Roth 401k or 403b no longer needed RMD
  • [12:00] An update to 529 plans
  • [16:58] Key takeaways

Changes to the Secure Act

This is a great time to be a retirement planning podcaster. It seems like the past few years have brought several rounds of historic, once-in-a-lifetime legislation. Typically there aren’t many legislative changes regarding retirement tax planning but the past few years have seen the Tax Cut and Jobs Act, the Secure Act, and now, of course, the Secure Act 2.0.

Since Bret and I attended a Secure Act 2.0 training this week, we wanted to update you on the latest retirement and tax planning changes brought on by the new legislation.

It seems like the past few years have brought several rounds of historic, once-in-a-lifetime legislation. Share on X

RMDs are changing again

One of the biggest surprise changes in the Secure Act 2.0 was to the required minimum distribution (RMD) age. For years RMDs were set to begin at age 70.½. Recently they had increased to age 72 and now they are changing again to 73 and 75 respectively. The good news is that, although the rules are complicated, this year no one will come to RMD age.

If you were born between 1951 and 1959, the RMD age has been pushed out to age 73. For those that were born in 1960 or later RMDs will begin at age 75.

Other exciting news from the RMD front is that the penalties are changing. Previously, if you calculated your RMD incorrectly or simply forgot to take them you suffered a 50% tax penalty. That penalty has now been reduced to 25%, and even more exciting is that the tax penalty could be reduced to 10% if you correct the mistake within the correction window.

Listen in to hear an actionable tip to help ensure that you take your full RMDs.

Roth 401K and 403Bs no longer require RMDs. Share on X

529 accounts now have a plan b

Another exciting change is to 529 accounts. Many people worried about saving too much money in 529 accounts since they have been so limited. There are still plenty of restrictions on them, however, you can now roll over money from a 529 into your Roth IRA. So, if your child ends up receiving scholarships or not needing all the money in their 529 accounts, you’ll have an additional option to use the remaining funds.

You can now roll over money from a 529 into your Roth IRA. Share on X

Retirement tax planning is now more important than ever

It has never been more important to be proactive in your retirement tax planning. With the rise in RMD age, you’ll have to ensure that you plan ahead so that you don’t end up having to take out more money than you can spend in your twilight years.

Listen in to hear our newest advisor and contributor to the show. Bret was pretty nervous about his first podcast, so please give him a warm welcome. Go on over and leave him a 5-star review on your favorite podcasting app!

Connect with Benjamin Brandt

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