How does Secure ACT 2.0 affect your retirement?

Nate Crosby |

Check out our video recording on YouTube

Changes in RMD Age

The SECURE ACT stands for Setting Every Community Up for Retirement Enhancement. SECURE Act version 2.0 was recently passed and changes several aspects of the financial planning process. In the podcast, we discuss our opinion that the biggest change is the age at which investors must begin making withdrawals from their IRA accounts. Effective January 1, 2023, the required minimum distribution age is pushed from 72 to age 73. As Americans are working longer, this allows investors to defer tax one (1) more year. Over time the age of minimum distribution will continue to go up. The SECURE Act 2.0 pushes the required minimum distribution age to 75 in 2033.

As planners, we carefully look at the impact of taxes associated with income and estate planning. While Roth IRA conversions can be a useful tool in saving investors and beneficiaries significant tax burden, as the required minimum distribution age continues to be pushed back, we believe it may reduce the number of investors that elect to convert. In any case, investors now have more choices to delay or reduce taxation. 

Listen to the full episode for additional context and discussion. 

Please note: This content is not a direct recommendation for investment. Investing involves risk including the potential loss of principal. Not all investments are suitable for all people. Crosby Advisory Group, LLC is a registered investment advisor in Ohio, Florida, and Texas.