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Jamie Letcher
VP, Wealth Management
Summit Financial Advisors
Located at Summit Credit Union
401 S. Yellowstone Drive
Madison, WI 53719
Phone: 608-271-1012
Email: james.letcher@lpl.com
November/December 2023
SECURE 2.0 Act Could Impact Your Plans
The SECURE Act and SECURE 2.0 Act made several changes that could affect your retirement and estate planning. Understanding what they could mean for your plans and discussing your options with your tax and financial professionals should be a priority. This article summarizes some of the Act's provisions.
Raising the Withdrawal Age
SECURE 2.0 Act raised the age at which you must take required minimum distributions (RMDs) from qualified retirement accounts, such as a 401(k) or other tax-deferred plans. Retirees can wait until April 1 of the year after the year in which they turn 73 to begin taking withdrawals, potentially allowing another year for their account balance to grow. In 2033, the age for taking RMDs will increase to 75. In addition, the tax for missing a required withdrawal has been significantly reduced.A 10-year Time Limit
The Act imposes a 10-year limit on distributions from inherited IRAs. Previously, IRA beneficiaries could take RMDs throughout their lifetimes and leave the IRA principal to the next generation. Now, recipients of an inherited IRA must deplete the account within ten years. This rule curtails the ability to transfer wealth from one generation to the next. Spouses, dependent children, and disabled or chronically ill beneficiaries are not affected by the 10-year limit.New Use for Unused Funds
You can convert funds in 529 savings plans* not used for education expenses to a Roth IRA for the account beneficiary. A child or grandchild who does not need all the money in the account to pay for education can now get a head start on retirement savings.A Searchable Database
The Act requires the creation of a “lost-and-found” database where families can search for qualified retirement accounts that may have been forgotten by the deceased. Lost funds generally default to the state. The purpose of the database is to help beneficiaries claim the funds.Get Professional Help
Changes brought about by the SECURE Acts may impact your situation. Getting your legal, tax, and financial professionals involved in reviewing your current plans can help determine whether you need to make changes.* Certain restrictions apply. For example, the 529 savings plan must have been open for more than 15 years and the maximum that the beneficiary may rollover during their lifetime is $35,000. Speak with your financial and tax advisors for additional information.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Summit Credit Union and Summit Financial Advisors are not registered as a broker/dealer or investment advisor. Registered representatives of LPL offer products and services using Summit Financial Advsiors, and may also be employees of Summit Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from and not affiliates of, Summit Credit Union or Summit Financial Advisors. Securities and insurance offered through LPL or its affiliates are:
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