Highlights of the SECURE Act 2.0

Senior Law News | Jan 10, 2023 | Jennifer S. Rossettini

Readers may recall the passage of the Setting Every Community Up for Retirement Enhancement (SECURE) Act in December of 2019, which resulted in major changes to how beneficiaries of retirement plans can withdraw from those plans at the account owner’s death.  On December 23, 2022, the U.S. House of Representatives passed the Consolidated Appropriations Act of 2023, which includes a retirement bill known as SECURE Act 2.0.  Some of the highlights include the following.

The SECURE Act 2.0 changes the age that withdrawals must begin to be made from retirement plans from 72 to 73 for individuals born between 1951 and 1959, and from 72 to 75 for individuals born in or after 1960.

Prior to SECURE 2.0, individually held Roth IRA’s had different rules than employer sponsored Roth accounts.  Specifically, while required minimum distributions (“RMD’s”) were not required from individually held Roth IRA’s, they were required from employer sponsored Roth accounts.  This is no longer true.  RMD’s are not required for either type.  Similarly, while matching contributions were previously not allowed to be made to the Roth “side” of an employer sponsored retirement account, they are now allowed under SECURE 2.0, however, the employee will be taxed on employer contributions to the Roth.

Another provision of SECURE 2.0 that readers may find interesting is the ability to move unused 529 plan money into a Roth IRA.  Prior to the act, if the beneficiary of a 529 plan did not use the funds in the account, the owner had to change the beneficiary to someone who would use the funds or allow the beneficiary to withdraw the funds and be subject to taxes and a penalty.  Now, beginning in 2024, leftover 529 plan funds can be moved directly into a Roth IRA in the name of the 529 plan beneficiary.  The conditions of doing so include (1) the 529 plan must have been maintained for 15 years or longer; (2) the last five years’ worth of contributions and earnings cannot be moved to a Roth IRA; (3) the annual limit is the IRA contribution limit for the year less any “regular” contributions made during that year; and (4) the maximum that can be moved from a 529 plan to a Roth IRA is $35,000 during the beneficiary’s lifetime.

Surviving spouses of retirement plan owners now have an additional option when they are the designated beneficiary of such plan.  Beginning in 2024, in addition to the options of rolling the decedent spouse’s IRA into their own IRA, electing to treat the decedent spouse’s IRA as their own, and remaining an eligible designated beneficiary of the IRA, the surviving spouse can elect to be treated as the deceased spouse.  This would allow RMD’s to be delayed until the deceased spouse would have reached the age at which RMD’s were set to begin (their age 72, 73 or 75).  Even more interesting is the fact that if the surviving spouse dies before RMD’s begin, the surviving spouse’s beneficiaries will treated as if they were the surviving spouse and be able to stretch distributions over their life expectancy instead of the 10 years imposed by the first SECURE Act.

Ask Anya:

Hook Law Center: Anya, my feline friend needs to take some antibiotics and he is not being very cooperative.  What can I do?

Anya: There are different options, depending on the type of medication.  The easiest way to give a difficult cat liquid medication is to mix it in with a small amount of canned food that you then feed by hand.  If your cat is unwilling to eat the food, you will need to give the medication directly into the cat’s mouth.  Gently pull the head back by the neck scruff and place the syringe behind one of the canine teeth, angled towards the tongue.  It is important to depress the syringe slowly and not inject the liquid straight into the back of the throat.  For medication in pill form, it is easiest, again, to hide the pill in food.  If that is not an option and you have to put the pill directly into your cat’s mouth, the trick is to get the pill as far back as possible to encourage swallowing.  Be sure to have fresh water available.

Jennifer S. Rossettini

Attorney, Shareholder, CFP®
757-399-7506 | 252-722-2890
[email protected]

Jennifer Rossettini is a Shareholder of Hook Law where she focuses her practice in the areas of elder law, estate planning, estate and trust administration, and financial planning. Her practice includes complex estate planning for clients with a net worth over $5 million as well as simple plans for individuals with very limited assets. Ms. Rossettini rejoined the firm in 2018 after spending ten years as a CERTIFIED FINANCIAL PLANNER™ professional with the wealth management divisions of two regional financial institutions. She is a member of the Financial Planning Association, serving as Secretary for the Hampton Roads chapter and serves on the Board of Directors of the non-profit organization, PrimePlus Senior Centers. Jennifer lives in Virginia Beach with her husband and two daughters. She is active in the Girl Scout organization, serving as both a troop leader and as the treasurer for the local Service Unit.

Practice Areas

  • Elder Law
  • Estate & Trust Administration
  • Estate Planning
  • Financial Planning
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