We’re getting a lot of questions about the SECURE 2.0 provision allowing tax-free rollovers from 529 plans to Roth IRAs. Although this new rollover opportunity sounds exciting, there are a number of restrictions that may limit its appeal.Section 529 plans offer a great opportunity to pay for college, K-12 tuition and student loan repayments. Nearly every state offers at least one plan. The most popular type of 529 plans are college savings plans, in which you make after-tax contributions that are invested in mutual funds or ETFs offered under the plan.
Question:I am confused regarding the requirements for making a qualified charitable distribution. Is it necessary for the donation to be sent directly from the financial company to the charity, or can the check be made out to the charity but sent to me and then sent to the charity?Thank you,John
One of the provisions of the recently passed SECURE 2.0 that has gotten the most attentions is the one that allows some retirement account owners to delay their required minimum distributions (RMDs) a little longer. The new law pushes back the RMD age from 72 to 73. Eventually, it will go to 75, but that is not for another decade.
SECURE 2.0 includes a number of new ways a person under the age of 59 ½ can access retirement account dollars while avoiding the 10% penalty. Historically, there have been more than a dozen ways to sidestep the extra charge. Things like first-time homebuyer costs, higher education costs and disability are all legitimate exceptions to the early distribution penalty. While taxes could still apply, the 10% penalty is off the table for eligible distributions. Here are two of the new “penalty-free access points” to both IRA and company plan retirement accounts made available in SECURE 2.0:
Question:On reading your SECURE 2.0 information, a revised RMD (required minimum distribution) to age 73 was mentioned. Prior to this new legislation, 72 was the RMD age. If this is in effect now in 2023, is it correct that if you turn 72 in 2023, you won’t be required to take an RMD in 2023? Based on what I’ve read, the first RMD for a 72 year-old in 2023 would be pushed to age 73 in 2024?Thanks in advance for your insights!
In our December 28 and January 2 Slott Report articles, we focused mostly on the provisions of the new SECURE 2.0 law that apply to IRAs. But many of the law’s changes are directed towards workplace plans, such as 401(k)s.Here’s a rundown of the most important plan changes:
The year 2023 has arrived. It is a new year, and we have new rules for retirement accounts thanks to SECURE 2.0 which Congress passed in the waning days of last year. SECURE 2.0 is a giant piece of legislation, clocking in at over 300 pages, and some of its provisions will not be effective for years to come. Here are some of our top takeaways from the SECURE 2.0 provisions that are effective right away.
QUESTION:I have an inherited IRA from my father. He was born 9-27-1927 and died 7-19-2019 at age 91. I was born 12-13-1952 and my age is 70. Two on-line calculators offered by brokerages show the factor this year (2022) to be 18.4 on my inherited IRA from my father. I cannot verify that factor on any of the IRS tables. Could you copy me or direct me to the correct table?Many thanks,Jim
This holiday season Congress has given us SECURE 2.0. With no time to spare to avoid a government shutdown, they passed the $1.7 billion Consolidated Appropriations Act of 2023 and sent it off the President for signature. Tucked inside the more than 4000 pages of legislation, you can find SECURE 2.0.
Question:Ed, I started reading your newsletter and I wondered what you thought of IRS Notice 2022-53. It made sense to me to the point where it said that "the beneficiary of an employee who died after the employee's required beginning date must take the RMD beginning in the first calendar year after the calendar year of the employee's death."But then in the end they lost me when it says it applies only if the employee died in 2020 or 2021. Seems like it should say 2022 as well.
