Nearly a year ago, SECURE 2.0 made significant changes to Americans’ retirement and estate planning. The SECURE Act 2.0 altered the rules for retirement accounts, ranging from minimum distributions to mandatory withdrawals.

Click here for the full text of the SECURE Act 2.0. If you require confidential answers to your questions, please contact a reputable estate planning attorney at Edward S. Clay, P.A. Law Offices.

What Is the SECURE 2.0 Act?

The SECURE 2.0 Act is an extension of the original SECURE Act. It introduces significant revisions to retirement and savings regulations. Building on its predecessor’s framework, this legislation aims to strengthen retirement security and promote long-term financial stability.

Changes to the Original SECURE Act

Under the SECURE 2.0 Act, several key provisions reshape the retirement domain. This regulation can influence individuals’ savings strategies and estate planning considerations.

Expansion of Retirement Plan Accessibility

Small business owners are encouraged to establish retirement plans, thereby reducing the cost of implementation and administration. This growth influences estate planning methods for retirement assets by providing additional opportunities for individuals to join employer-sponsored programs.

Adjustments to Inherited IRAs

The SECURE Act mandates that the majority of assigned beneficiaries must withdraw the complete balance from an inherited retirement account within a decade of the original account owner’s passing. In scenarios where a beneficiary does not qualify as a designated beneficiary, such as with a charity or another estate, distributions must be completed within the fifth year following the death of the account owner.

Also, effective 2024, 529 plans held for at least 15 years may be rolled over into a Roth IRA, up to $35,000.00 of excess funds, opening up new opportunities for investors.

Raising the Age for Required Minimum Distributions (RMDs)

The age for initiating RMDs from retirement accounts has been raised (from 70.5 years to 73 years for people born after 1951 and 75 years for people born after 1959), giving individuals more flexibility in managing their retirement assets and coordinating estate plans.

Updated Contribution Match Allowances

Employers and other plan sponsors will be able to match contributions made toward student loan repayments as of the beginning of 2024, with the same vesting schedule as elective deferrals. This integration presents new avenues for retirement savings and alters estate planning dynamics.

How to Integrate the SECURE 2.0 Act Into Your Estate Planning

To effectively incorporate the provisions of the SECURE 2.0 Act into estate planning strategies, individuals should consider the following:

Review and Update Existing Estate Plans

With the changes introduced by the SECURE 2.0 Act, individuals may need to change their existing estate plans to ensure alignment with the new legislative framework. This includes revisiting beneficiary designations, asset distribution strategies, and tax planning measures.

Integrate Retirement and Estate Planning Goals

The SECURE 2.0 Act provides guidelines for individuals to effectively integrate their retirement and estate planning goals. Individuals can maximize their legacy by aligning retirement savings strategies with estate planning objectives. This integration can ensure a seamless transition of assets to future generations with protection from life risks.

If you want to take full advantage of the SECURE Act 2.0 for better retirement and estate planning, contact Edward S. Clay, P.A. Law Offices for more information on how the SECURE Act and SECURE 2.0 may affect your estate plan and retirement accounts. Get in touch with us now to get started on securing your future.