The piece of legislature known as the SECURE Act 2.0 has been passed by both the US Senate (Thursday) and House (Friday), and is waiting for the signature of President Biden (presumably after the holidays).

The SECURE Act 2.0 is actually part of the 2023 omnibus spending bill – the Consolidated Appropriations Act, 2023. You can find the full text of the appropriations act here, with the SECURE Act 2.0 starting on page 2046.

Here I highlight in the shortest version possible, the provisions that are most likely to impact you. Those include:

• Gradual increasing of RMD beginning age, from 72 to 73 to 75, in 2023 and in 2033.
  • Pros – This gives more time to spread out Roth conversions after peak earning years.
  • Cons – Shorter RMD distribution times. Mix with the 10 year time limit on distribution of non-spouse beneficiaries (eg the lack of the stretch IRA), and there’s potential for a lot of taxes.
• Changing of Roth 401k and Roth 403b so they are no longer subject to RMDs, joining the Roth IRA, beginning in 2024.
• Roth versions of SEP and SIMPLE IRA’s would be created, as of 2023.
• Roth only catch up contributions if you made too much the prior year – beginning in 2024, for prior year wages of >$145k.
• If your employer chooses, they can count your student loan payments as contributions to your 401k, for matching purposes.
• An increase in the maximum QCD amount (had been stuck at $100k), because a COLA kicks in starting in 2024.
• The IRA catch-up contribution (stuck at $1k for many years now) will finally get a COLA as of 2024.
• 403k/401k catch up limits get more complicated but there’s also a boost: For ONLY those aged 60, 61, 62, and 63 as of the end of the year, beginning in 2025 that limit goes up to 10k or 150% of the regular catch-up. Remaining would be regular catch-up eligible for ages 50+.
• Amending Section 72(t) to allow for penalty free distributions for those terminally ill, defined here as death expected within 7 years. Effective immediately.
• The penalty for missing an RMD had been 50%; it will now reduced to 25%, and if it’s timely corrected reduced to 10%. Effective 2023. RMD penalty statute (time the IRS can have to come after you) had been forever, now limited to 3 years.
  • I suspect you can still request waiver of the penalty, which had been available if you did a number of steps.

There you go, a short and readable list of changes. Which ones impact you?