SECURE ACT 2.0 Made Important Changes to Retirement and ROTH Accounts - Retirement Planning
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- เผยแพร่เมื่อ 7 ก.ย. 2024
- The Secure Act 2.0 signed a lot of changes into law that impact retirement savings and withdrawal rules. However, because so many people in their 50s and 60s wish they had more money in the ROTH accounts, I’ll focus on what the changes mean to ROTH IRAs and a few ways you might be able to get more into those accounts.
Dave Zoller, CFP®
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If I said it a 1000 times before, I'll say a 1000 times more... These videos are by far the best ones out there for anyone who is looking for the "best scoop" on a retirement plan. Thank you again Dave. Cheers!
The new RMD of age 73 in 2023. Actually, it’s better than that if you’re a lot younger.
If you won’t turn age 75 prior to 2033, the RMD now starts at age 75!
But keep mind, the RMD % is actuarially based. So moving the RMD age later, also increases the RMD % at that point.
I've complained to my senators and representative that catch up contributions are now all Roth in 2024 so taxable at likely the highest tax bracket most will ever be in.
I like this video because you are reviewing details not commonly convered in normal media stories of Secure Act 2.0. It's those details that make the difference. Thanks.
Thanks for this video! It's amazing that since the Act was just passed at the end of 2022 and is now in effect, there are some key changes.
One of the things I love about roth is that in actuality it increases the amount you're putting in to retirement every year. Think about it, maxing your 403b with roth is like putting in an extra $5k per year into your retirement. That adds up quick.
Thank you so much for this video. It was so informative. I loved it! Looking forward to more content! 🎉
I'm 72, will be 73 this year. I started RMDs in 2022. The new rules are not helping me. And it is expensive, between additional tax and the Medicare premium penalty... If you are younger do Roth if you can.
Please cover reducing NESE to prevent reduction in SSA benefits. The only benefit I can see is Home Office Deduction. If you created a fairly good size business space you could reduce your NESE.
All your videos are so informative and helpful! Thank you.
You are so welcome!
I've been advocating the 529 recipient to use it for their (future) children.
Heck yes! Your videos are great!
I find these videos useful. Thank you.
Love to hear about positive options to manage my retirement distributions and managing tax burden. Thanks.
The 529 to Roth Rollover - parents, this doesn’t help you unless you yourself are the named beneficiary! Your kid or grandkid, the named beneficiary, can roll it over to their Roth IRA.
Always informative, thank you for sharing the changes and implications
I've never liked the 529. It is a great investment vehicle but it is only for college savings, but lots of kids don't go to college. A UTMA is a better vehicle IMHO but you have to trust your kids because it is theirs when they turn 18 or 21 and can be used for college or something totally irresponsible.
Changes include:
1. Removal of Roth RMDs
2. 529 rollovers to Roth
3. Simple/SEP roth contributions
4. Age 50+ catch up roth contributions
5. Employer match to roth 401ks
Good summary, Yvette. Thanks!
I'm confused. I thought that the $145,000 threshold that requires catch up contributions must go to a Roth, was based on one's income, and not on how much is already in the account???
Great video!!
Non-qualified 529 withdrawals - the pain might not be as bad as it appears.
First, the 10% penalty is on the *growth* of the 529, not the entire amount, including principal (your contributions).
Second, if you’ve been managing your income low enough, pre-Medicare to qualify for the Healthcare Premium Tax Credit, the income tax on withdrawal might be lower than you think since it too is on the growth of the 529… but then you’d have to be careful not to put your Healthcare PTC at risk.
Note, for any partial withdrawal, whether qualified or non-qualified - the principal/contribution and growth portions are pro-rated so the ratio remains the same for the withdrawals as well as the remaining 529 balance.
Enjoy!
I have an appointment to meet with a local financial planner this Thursday, but when I saw their form where I have to list all my assets, insurance, etc. for the meeting, I suddenly started feeling overwhelmed and uncomfortable. Do most financial advisors want to see a prospective client's information at the first meeting? I know this is not the topic of your video, but I have been binged watching your videos. Thank you.
Not every advisor will make you list out everything before the meeting.
But most will want to know where you are and will ask about your current accounts in the first meeting.
@@StreamlineFinancial Thank you!
My plan
Retired at 60, now 62, but still working pt and making enough w2 income to fund or mostly fund my Roth, basically I’m taking from traditional IRA 8000-12000 a year and using to fund Roth and max out my wife’s HSA , which should reduce my RMDs later
Wife is 5 years younger and will retire at 59, we’ll do same with hers as she’ll work pt too
Hopefully pay some now, pay less later. I’m sure the laws will change 8 more times before I’m even at 72/73/75 whatever
Essentially, the government is making it easier to pay your taxes NOW rather than later. They need more tax revenue NOW.
I enjoyed the video.
Great video
You said if your Roth 401k balance is over 145k then catch-up has to go into Roth 401k instead of pre-tax 401k. Did you mean if your income is greater than 145k?
For rule 2, 529 to Roth rollover, is this for rolling the 529 to the Beneficiary's (eg. Child's) Roth or my (parent) own Roth?
Just beneficiary, not owner. I guess as the owner, you could pay penalties etc. and put it into yours if you couldn't give it to your kid. I think we all hope that's not the case!
Child's. And there are several rules. Limited amount. Must be "old money".
great video. How about Solo 401k ? Did that change?
Do you know if employer matches funds to a ROTH will that create a taxable event for the employee?
Good stuff.
Your video is incorrect in respect to the Roth discussion pertaining to the $145,000 rule for catch up contribution. You state that it is based on the value of your Roth account. That is incorrect. It is based on your taxable income for that year. Rule > Effective for tax years beginning after December 31, 2023, SECURE Act 2.0 requires that any retirement plan (except a SARSEP or SIMPLE IRA plan) that permits catch-up contributions must treat any catch-up contributions made by certain “High-Paid Participants” as designated Roth contributions. For these purposes, a “High-Paid Participant” is an employee whose wages (as defined in Internal Revenue Code (Code) Section 3121(a)) from the employer sponsoring the plan during the preceding calendar year exceeded $145,000, as adjusted for cost-of-living increases.
Catch up contributions are not forced into ROTH. They can go into 401K.
More people in their fifties sixties and seventies wish they had more Roth?
Is that because they were in lower tax brackets while working than there effective tax rate in retirement??
Or
Is that because they want there cake and eat it too?(they just don't want to pay taxes)
Is most people in your reference people using a planner such as yourself (say top 10 or 20% of retirement assets) or the general population.
The overwhelming amount of people pay less taxes in retirement
Thankful that we have Democratic leaders in place who are focused on creating policies like this for us.