What is the Secure Act 2.0?

The Secure Act 2.0 was signed into law on December 29, 2022.  It builds upon the Secure Act originally passed in 2019.  The intent of the act was to make it easer for all Americans to save for their retirement.

What financial planning areas are impacted this year?

  • The Required Minimum Distribution (RMD) Age has changed:
    • If you were born between 1951 – 1959, your RMD begins when you turn 73
    • If you were born in 1960 or later, your RMD begins when you turn 75
  • The penalty for failing to take a RMD has been decreased from 50% to 25%.  The penalty can be decreased further to 10% if failure is corrected by the end of the second year in which the RMD was to be taken.
  • SIMPLE and SEP IRAs may accept employee AND employer Roth contributions.
  • Public safety workers (including private sector firefighters and state/local correctional officers) may be eligible to access retirement funds penalty free when separating from service and over the age of 50.  If under the age of 50, you may still be eligible if you have at least 25 years of service.

What areas are impacted in 2024?

  • Catch-up Contributions limits will be inflation indexed beginning in 2024 and will be increased to $10,000 starting in 2025.
  • Extra funds in a 529 Plan may be transferable to a beneficiary’s Roth IRA up to $35,000.
  • Employers will be required to provide part-time employees with the option to participate in an employer sponsored retirement plan.
  • Provides employers with two ways to allow participants access to funds in case of an emergency.
    • Employees can withdraw up to $1000 (once per year) without penalty and may be repaid within 3 years.
    • Employers may offer an emergency savings account for non-highly compensated employees to save into up to $2,500 after-tax. 

Who is Grow Financial?

We are Tampa Bay’s homegrown credit union.  At Grow Financial, we believe that financial planning and an ongoing relationship with a financial advisor are the most valuable investments you can make through our CFS advisors. We ask targeted questions and listen to our members’ dreams and goals. We then work together to develop appropriate and manageable plans that build on what our members have already worked hard to create to help them reach their financial goals.