Secure Act Updates - 2023 (Key Provisions: Required Minimum Distributions & 529 Planning)

Last December, congress passed a spending package which included updates to the SECURE act originally passed end of 2019. The SECURE Act 2.0 of 2022 made some major changes to the retirement rules for individuals and employer plans.

There are many provisions in the act that will benefit investors. I will cover the two I think are most pertinent here—the raising of the age for required minimum distributions and changes in 529 planning that allows more flexibility.

Required Minimum Distributions (RMDs) - The beginning date for required minimum distributions (RMDs) was raised from 72 to 73, starting in 2023, and to 75 in 2033.

529 Planning & Roth Funding - Families with leftover 529 money will be able to roll it into Roth IRAs. Meaning, if your child does not use all the funds you’ve saved into their 529, you may utilize the excess to supplement your retirement needs. This provision is effective in 2024, giving investors 2023 to factor this new rule into their long-term planning.

We will also discuss a few other benefits to investors this act has put in place.

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