• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Who We Are
    • About Our Firm
    • Career Opportunities
    • Meet Our Team
    • News and Events
    • Seniors Rock Radio
  • Estate Planning
    • Elder Law & Medicaid Planning
    • Estate Planning Services
    • Estate and Gift Tax Figures
    • Family Farm Succession Planning
    • Family-Owned Businesses & Farms
    • IRA Planning
      • Planning With An IRA
      • IRA & Retirement Planning
    • Legacy Planning Services
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law Resources
      • Elder Law Reports
    • Guardianship & Conservatorship
    • Hospice Care
    • Veteran’s Benefits
  • Resources
    • Definitions
    • FREE Estate Planning Worksheet
    • FREE Webinars
    • Estate Administration Legal Guide
    • Estate Planning Articles
      • Questions for Your Estate Planning Attorney Before Creating Your First Estate Plan
      • How to Create Your First Estate Plan in 2022
      • How to Choose a Guardian for Your Child
      • Address These Three Questions in Your First Estate Plan
    • Estate and Gift Tax Figures
    • Frequently Asked Questions
      • Adult Guardianship
      • Alzheimer’s Care
      • Custodial Accounts for Minors
      • Estate Planning
      • FAQs for Families Without an Estate Plan
      • Elder Law
      • IRA & Retirement Planning
      • Is Your Estate Plan Outdated?
      • Legacy Planning
      • LGBTQ Estate Planning
      • Medicare and Social Security
      • Probate
      • Probate Avoidance
      • Irrevocable Trusts
      • Trust Administration
      • Trusts
      • Veterans’ Benefits
      • Wills
    • Newsletters
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
    • Top Estate Planning Techniques
  • Reviews
    • Our Reviews
    • Review Us
  • Medicaid Planning
    • Medicaid Planning
    • Emergency Medicaid & Nursing Home Planning
    • Medicaid Frequently Asked Questions
    • Medicaid Resources
  • Blog
  • Contact Us

Law Office of Michael Robinson, P.C.

Estate Planning Services in Rochester, New York and the Finger Lakes Area

Connect With Us Today

(585) 374-5210
Law Pay Button
Attend a Free Webinar
Home » Retirement Planning » Secure Act 2.0: More Potential IRA Changes

Secure Act 2.0: More Potential IRA Changes

February 11, 2021Retirement Planning

SECURE Act 2.0An individual retirement account can give you some additional resources to draw from during your senior years, and if you don’t need the money, it would be part of your estate plan. There were some changes to the IRA guidelines implemented for 2020 due to provisions contained within the SECURE Act.

In October of 2020, a new piece of legislation with bipartisan support was introduced that is being called SECURE Act 2.0. This measure would make additional changes to IRAs and 401(k)s.

We will provide a rundown here, and we will start with a review of the changes that were implemented when the first SECURE Act was enacted.

Required Minimum Distribution Age Increase

Traditional individual retirement accounts are funded with pre-tax income, so you get a tax break each year when you file. On the flip side, distributions are subject to regular income taxes, and you can take penalty-free withdrawals when you are 59.5 years old.

There are a few exceptions to this rule. You can use money in the account to pay for higher education expenses and medical bills. Distributions can be used to cover health insurance premiums if you are unemployed, and you can remove up to $10,000 to help finance a first home purchase.

The Internal Revenue Service wants to start getting some money before you pass away, so you are compelled to take required minimum distributions (RMDs) when you reach a certain age. Before the enactment of the SECURE Act, this age was 70.5, but it was increased to 72.

This measure also gave traditional account holders the ability to contribute into their accounts for an open-ended period of time with no age limit. In the past, they had to stop making contributions when they were 70.5 years of age.

These changes did not impact Roth individual retirement account holders, because these accounts are funded with after-tax earnings. Distributions are not taxed, so there is no reason to force account holders to take required distributions at any time.

There has never been any age limit for making contributions into a Roth individual retirement account.

Elimination of Stretch IRAs

The first SECURE Act made a very significant change to the rules that impact non-spouse beneficiaries of individual retirement accounts.

Beneficiaries of both types of accounts are forced to take requirement of distributions on an annual basis. The amount that they must accept is based on the extent of the resources coupled with the age of the beneficiary.

Before the enactment of the SECURE Act, beneficiaries could take only the minimum that was required by law for any length of time. The beneficiary could stretch out their account until it was exhausted to maximize the tax benefits.

Now, all of the assets must be distributed within 10 years the time of acquisition, so the stretch strategy is a thing of the past.

SECURE Act 2.0

The sequel to the original SECURE Act would raise the required minimum distribution age for traditional account holders to 75. It would also give employers the right to provide individual retirement account contributions that match qualified student loan payments.

Employers would be required to enroll eligible employees into their group retirement account plans, but the employees would be able to opt out. The savers credit for low income participants would go from $1000 to $1500, and more people would qualify for the credit.

401(k) account holders that are 50 years of age and older are allowed to make catch-up contributions that are $6500 over the annual limit. SECURE Act 2.0 includes a provision that would increase this amount to $10,000 for participants that are 60 years of age and older.

Attend a Free Webinar!

You found your way to our website because you are looking for information about important estate planning topics, so you should definitely attend one of our webinars.

The sessions are free, but we ask that you register in advance so we can reserve your spot. You can see the dates and obtain registration information if you visit our webinar page.

 

 

  • Author
  • Recent Posts
Michael Robinson, Estate Planning Attorney
Michael Robinson, Estate Planning Attorney
Clients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors.
Michael Robinson, Estate Planning Attorney
Latest posts by Michael Robinson, Estate Planning Attorney (see all)
  • How Estate Planning for a Family May Trap the Unwary Practitioner - August 31, 2022
  • State Income Taxation of Social Security Benefits - August 24, 2022
  • Understanding Tax Apportionment Clauses - August 17, 2022

Other Articles You May Find Useful

Just When You Thought You Understood The 10 Year Rule Think Again 150x150
Just When You Thought You Understood the 10-Year Rule, Think Again
Application Of The Updated Life Expectancy Tables 150x150
Application of the Updated Life Expectancy Tables
Medicare eligibility age 09
Medicare Eligibility Age May Go Down
Medicare premiums 2021
A Look At 2021 Medicare Cost Increases
retirement planning 3
2021 Social Security Updates Have Been Released
Rochester retirement planning attorney
Social Security Retirement Benefits

Primary Sidebar

Law Office of Michael Robinson, P.C.

Blog Subscription

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

TESTIMONIALS

News & Events

Seniors Rock Radio Show Recording 5-1-21

https://drive.google.com/file/d/1U7UkQbEGy-xY7XFAXvX9Qz7pKSVDVV3D/view?usp=drive_web   Author Recent Posts Michael Robinson, Estate Planning AttorneyClients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors. Latest posts by Michael Robinson, Estate Planning Attorney (see all) How Estate Planning for a Family May Trap the Unwary Practitioner -... Read more →

Pittsford Office

1163 Pittsford-Victor Road, Suite 120 (Powder Mill Office Park)
Pittsford, NY 14534-3817
Phone: (585) 374-5210
Fax: (585) 485-0394

See Larger Map Get Directions

Map

mrobinson_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
robinson law logo

The Law Office of Michael Robinson, P.C.

Attorney Advertisement


© 2023 American Academy of Estate Planning Attorneys, Inc.