Last year, Congress passed a new tax bill called “The SECURE Act 2.0” that carried a long list of changes to the tax code. Of these changes, there are some impactful provisions that go into effect January 1, 2024. Below is a list of some of those provisions that will go into effect.
New Required Minimum Distribution Age
If you have started to take RMDs, you will have to continue to take them at the normal schedule. If your birthday falls between the years 1951 – 1959, your new RMD age is 73. If your birthday falls on or after 1960, your new RMD age is 75.
The New Post-Death Option for Surviving Spouses
This gives the surviving spouse the opportunity to set the “age” for the IRA to the deceased spouse. This can provide a benefit if the surviving spouse is older than the decedent.
529-To-Roth IRA Transfers
If you qualify under several rules, starting in 2024 you will be able to transfer assets out of 529 Plans into Roth IRAs. If the transfer is elected, it will go from the plan to a Roth IRA for the beneficiary. Some of the rules include the 529 Plan must have been established for 15 years, the beneficiary must have the lesser of earned income or the Roth IRA contribution limit.
As the SECURE Act 2.0 prepares to roll out its provisions in 2024, we will continue to monitor your financial plans and update clients whenever necessary. These alterations demand careful consideration and strategic financial planning.