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Congress Has Spoken | Secures Act 2.0

Congress Has Spoken | Secures Act 2.0

January 19, 2023
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Secures Act 2.0 | Changes to RMDs & QCDs!

What you need to know about the recent Secure Act 2.0 Required Minimum Distributions (RMD) and Qualified Charitable Distributions (QCD) updates; keep reading. 

First, starting in 2023, the new RMD age has increased from 72 to 73, giving those who still need to take RMDs more time to let their money stay invested. Those who already were taking RMDs must continue taking RMDs. If you turned 72 last year and still need to take out your RMD from your retirement accounts, call our office to discuss your options to get your 2022 RMD out of your account by April 1.

Second, starting in 2024, anyone with a Roth retirement plan (e.g., 401(k) or 403(b)) will no longer be required to take annual RMDs from those accounts. Under the old rules, Roth retirement plans, NOT Roth IRAs, required individuals to take out an annual RMD. Congress finally figured out that this was moot and removed that requirement. Under the old rules, individuals could have moved their Roth retirement plan to a Roth IRA and avoided the annual RMD. However, starting in 2024, they will not have to go through that extra step due to the change. 

Third, starting in 2023, the Qualified Charitable Distributions (QCD) rules have been expanded to allow for a one-time $50,000 distribution to charities through charitable gift annuities, charitable remainder unitrusts, and charitable remainder annuity trusts, giving those who are charitably inclined more options when giving from IRAs. QCDs satisfy the RMD requirement from your IRAs but do not expose you to taxes on the distribution. They can be a powerful tool for those who want to donate to charities and do not need income from the IRA. 

All of the above changes are a move in a positive direction for retirement planning and give you more options when planning for the future. 

If you have any questions about the topics above, don't hesitate to contact the Dixon Financial Group Team to schedule a meeting.

Make sure to share this information; you never know who you will be helping.

David S. Dixon, CFP®