Flight #48: Financial Highlights of 2022 in Review, new 401k IRA limits, Secure Act 2.0 RMD changes and more…

Flight #48: New 401k, IRA Limits New SECURE ACT 2.0 A

Airline News:

New IRA, 401k 401(a)17 and 415 Limits

Secure Act 2.0

Highlights:

Setting Every Community Up for Retirement Enhancement (SECURE) Act...originally passed in December 2019.

• December 23, 2022, passed the Consolidated Appropriations Act of 2023, an omnibus spending bill that includes the much anticipated and long-awaited retirement bill known as SECURE Act 2.0.
  • RMD 73,75...plus reduced penalty 73-1951-1959 / 1960+ RMD 75 ▪ What does this do...Roth Conversions???
    • Plus 10-year rule from Secure Act 1.0
    • Beware of higher RMD at 73/75 - jump tax brackets???
    • QCD no effect – still 70 and a half years old.
  • No Roth 401k RMD (2024)
  • Roth style SEP and SIMPLE IRA
  • 529 plans to Roth IRA transfers up to $35,000.
    • Subject to annual Roth limits and 529 accounts in existence for 15 years.
  • Student loan payments count and qualify the employee for 401k matching. I.e., you'll get matched in your 401k for student loan payments. Base matching contributions on student loan repayments.
  • Catch up contributions:
    • 2025 – 60-63 – catch up contribution of 10,000 or 50% more than the standard catch-up contribution that year.
    • Catch up contributions are now linked with inflation
    • 2024 - $145k – catch-up contributions must be made in Roth
      • Roth basis if permitted by the plan sponsor SECURE Act 2.0 provides that all catch-up contributions to qualified retirement plans are subject to Roth tax treatment, effective for taxable years beginning after December 31, 2023, An exception is provided for employees with compensation of $145,000 or less (indexed)

https://www.kitces.com/blog/secure-act-2-omnibus-2022-hr-2954-rmd-75-529-roth-rollover-increase-qcd-student-loan-match/?utm_source=social&utm_medium=linkedin&utm_campaign=tagged_author

https://www.youtube.com/watch?v=i-PXuU_2wnA