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Jul 30 2025

The SECURE 2.0 Act and You: How New Legislation Is Enhancing Retirement Planning

by Maria Malloy, CFP®, Client Relationship Manager

In 2019, Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act, significantly reshaping the retirement landscape for millions of Americans for the first time in many years. The SECURE 2.0 Act was enacted soon after in 2022, expanding upon and enhancing the original legislation. Since its passage, several measures of the SECURE 2.0 Act have already been rolled out while others go into effect this year. This article will highlight several significant provisions of the SECURE 2.0 Act and briefly explain how they may impact those planning for, or already in, retirement.

Required Minimum Distributions

Participants of traditional tax-deferred retirement accounts such as IRAs and 401(k) accounts must take required minimum distributions (RMDs) upon reaching a given age. For nearly 40 years, that age was 70½. It increased to 72 with the 2019 SECURE Act, and the SECURE 2.0 Act pushed it back further still. Today, individuals born between 1951 and 1959 must begin taking RMDs at age 73, and at age 75 for those born in 1960 or after. This allows the funds to remain in the account for additional growth potential and greater flexibility of withdrawals and tax management.

The SECURE 2.0 Act also reduced the penalty for missing an RMD and for taking out less than the required amount. The penalty is now 25% of the shortfall, down from 50% prior to the SECURE 2.0 Act. Furthermore, if a correction is made in a timely manner, the penalty is dropped to 10%.

Changes to Roth Retirement Accounts

  • Elimination of RMDs from employer-sponsored Roth plan accounts – Roth retirement accounts differ from traditional retirement accounts in that contributions are made with after-tax funds. While Roth IRAs are not subject to RMDs during the owner’s lifetime, prior to the SECURE 2.0 Act, employer-sponsored plans such as Roth 401(k) or Roth 403(b) plans were. Effective 2024, that is no longer the case, allowing Roth funds across plan types to be treated the same and lessening confusion for plan participants.
  • Employer contributions – For individuals still working and saving for retirement with an employer-sponsored Roth 401(k) plan, employees can now elect to have employer contributions be made to the Roth side of the plan. While the amount is taxable to the employee in the year the contribution is made, this provision allows employees to accumulate additional Roth savings for tax-free growth and withdrawals in retirement.
  • 529 plan rollover to Roth – Concerned that saving for education expenses with a 529 plan will leave unused funds behind after graduation? A highly anticipated statute of the SECURE 2.0 Act aims to alleviate that concern by allowing a lifetime maximum of $35,000 to be moved to a Roth IRA. This will allow the tax advantages of the 529 plan to be retained while giving a young adult a head start on retirement. Conditions apply however, so it is imperative to discuss this option with your financial professional before initiating any transfers.
  • Opportunities for small businesses and the self-employed – Another change the SECURE 2.0 Act brings is the opportunity for small businesses and self-employed individuals to establish Roth SEP IRAs (Simplified Employee Pension) and Roth SIMPLE IRAs (Savings Incentive Match Plan for Employees). Previously, these types of accounts only allowed pre-tax contributions.

The SECURE 2.0 Act also created three tax credit opportunities for small businesses. These aim to incentivize the implementation of a retirement savings plan for employees; have an automatic enrollment feature; and to make contributions on behalf of employees. Qualifying for the credits is subject to specific requirements, so it would be wise to consult with a licensed CPA to ensure that all conditions are met in order to attain the credit.

Catch-Up Contributions

The SECURE 2.0 Act contains multiple provisions related to retirement plan catch-up contributions, which allows older workers nearing retirement to contribute funds beyond the standard limit.

  • Individuals 50 years and older and earning more than $145,000 in the prior year (adjusted for inflation) must make catch-up contributions to 401(k), 403(b), and 457(b) plans with after-tax dollars to the Roth side of the retirement plan. This does not apply to catch-up contributions to IRAs. Originally set to become effective in 2024, the IRS granted a transition period to allow plans time to make the necessary administrative adjustments.
  • The allowable catch-up contribution limit to IRAs is now indexed for inflation and will adjust annually. This applies to workers aged 50 and above.
  • A “super catch-up” contribution for individuals aged 60-63 goes into effect this year. Applicable to employer-sponsored retirement plans only, it allows the participant to contribute 150% of the normal catch-up limit of $7,500. That means in 2025, individuals in that four-year age range can contribute an additional $11,250 for a total of $34,750.

Charitable Giving

For older individuals who are charitably inclined, qualified charitable distributions (QCDs) have been a great way to support a charitable cause while also reducing one’s taxable income. Upon reaching age 70½, individuals can gift directly from their IRA and have the amount count towards their RMD and be excluded from income.

The SECURE 2.0 Act changed the annual allowable QCD amount to now be indexed for inflation ($108,000 in 2025) and grants a one-time allowance to use $50,000 of the QCD limit to fund a charitable trust or annuity as an alternative to gifting directly to a charity.

Other Notable Provisions

  • A special needs trust that is a beneficiary of an IRA is now considered an eligible beneficiary. Therefore, the inherited assets do not need to be distributed within 10 years as is required for noneligible beneficiaries.
  • Student loan payments may now be treated as elective deferrals for employer-matching purposes in workplace retirement accounts. This enables the employee to make payments towards their student loans and receive the employer match contribution to their retirement account.
  • A surviving spouse who is a beneficiary of a retirement account can now choose to be treated as the deceased spouse for RMD purposes. Particularly if the deceased spouse is younger, this allows the surviving spouse beneficiary to delay RMDs until the deceased spouse would have been RMD age. The calculated RMD amount is also based on the deceased spouse’s younger age, making the RMD amount smaller.

These are just a few of the key changes introduced by the SECURE 2.0 Act. While the legislation presents exciting opportunities for nearly all Americans, its complexity necessitates careful interpretation and application. To make the most of these provisions, and to avoid unintended consequences, it is important to collaborate closely with a trusted financial advisor and tax professional. With proper planning, the SECURE 2.0 Act can be a valuable tool in helping Americans achieve their long-term retirement goals.

Sources:

  1. Fidelity Viewpoints, “SECURE 2.0: Rethinking Retirement Savings,” Fidelity.com, May 20, 2025.
  2. “H.R. 2954 – Securing a Strong Retirement Act of 2022,” Congress.gov, March 30, 2022.
  3. Levine, Jeffrey, “SECURE Act 2.0: Later RMDs, 529-to-Roth Rollovers, and Other Tax Planning Opportunities,” Kitces.com, December 28, 2022.

Written by Liz Swagerty Olsen · Categorized: 401K, FINANCIAL ADVISOR, FINANCIAL PLANNING, INVESTMENT MANAGEMENT, INVESTMENTS, PERSONAL FINANCE, RETIREMENT PLANNING, WOMEN · Tagged: RETIREMENT PLANNING

Feb 28 2025

Cleaning and Organizing … the Swedish Way

There are many organizational methods for reducing our clutter and making our spaces more efficient, tidy, and serene. There is the “One-Touch Method” which bucks procrastination in favor of putting things away immediately after use, and the “Neat Method” which employs various color-coded containers and labeling for sorting and display. The KonMari method from Japan instructs organizers to ask themselves if their items still spark joy in them, and if not, to release the belongings with gratitude. And, yet another approach has risen in popularity, this time from Sweden, known as “döstädning,” or the translated “death cleaning,” which seeks to reduce clutter and stress from an aging person’s home and life.

While it may sound severe, the idea of döstädning is actually a very thoughtful and respectful exercise for both the individual and their loved ones. Contrary to KonMari, which centers on the individual’s attachment to their possessions, this approach asks how family and survivors will feel about the items left behind after a loved one’s death. Margareta Magnussen, author of “The Gentle Art of Swedish Death Cleaning,” explains how employing döstädning can streamline an individual’s space and create a peaceful environment in which they can focus on what matters to them at that stage of life. The process of sorting and gifting belongings and communicating with family and friends about what they would like to have can often bring loved ones closer together, and may minimize the future burden on family members, allowing them to focus on grieving rather than a large clean-out project.

For those interested in the process of döstädning, professionals recommend the following:

  1. Tell your family about this process you are undertaking, what you hope to get out of the experience and ask them what items they would like to inherit from you.
  2. Start with your clothing and closets, sorting through what does and does not fit and what can be donated to charity.
  3. Declutter furniture, décor, and household items by room and then size, gifting functional pieces to family and friends and donating the rest.
  4. Address digital information and share details for important vendors such as your bank and insurance provider to your next of kin.
  5. Take stock of valuable jewelry and heirlooms and communicate with your insurance provider regarding appropriate coverage. Next, give some thought to who you will leave these items to and make those wishes apparent in your documents.
  6. Gather your paperwork and leave clear instructions regarding your will, advance health directive, power of attorney and any other related documents to your intended survivors.

While it may seem like a big undertaking, döstädning can give practitioners the chance to find memory and meaning in their possessions, as well as a sense of lightness and contentment when they let them go.

To connect with a client relationship manager, email info@vcmi.net.

Written by Liz Swagerty Olsen · Categorized: CHARITABLE GIVING, DIVORCE, ESTATE PLANNING, FINANCIAL ADVISOR, FINANCIAL PLANNING, PERSONAL FINANCE, RETIREMENT PLANNING, UNCATEGORIZED · Tagged: FINANCIAL PLANNING, INVESTMENT MANAGEMENT, Personal Finance, RETIREMENT PLANNING

Jan 02 2025

New Year, Fresh Start

The start of the new year is a great time to review your finances and take any action that may be prudent. With that in mind, we have written a short manageable list of actionable items everyone can take to kick off their year on a productive and responsible note.

Revisit your budget

  • Take the time to review your spending over the last year. Did your actual spending budget align with what you had planned? Evaluate your spending trends and make appropriate adjustments to your household balance sheet.
  • Closely review your debt and strategize ways to pay it. Start by tackling the balances with the highest interest being charged and prioritize becoming debt free.

Prepare for the planned and unexpected

  • Project the cost of expensive essentials – have you been noticing issues with your water heater? Or is there a household appliance that needs to be replaced? Preparing for a large expense will feel better than relying on a credit card when the time comes.
  • Bolster emergency savings – no one wants to admit that they could be laid off or suffer some other setback that would put pressure on their savings. Look closely at what you have saved and what you can do to increase your savings in the short-term for a more secure future

Review your legal documents and insurance policies

  • Have there been changes in your life that should be reflected in your legal documents, like a change in residential address or marital status? Pull your files out and review what is stated and contact your attorney if there are updates to make.
  • Similarly, it may be worthwhile to assess your insurance coverage. If there have been changes to your home, such as an addition or remodel, it may be necessary to increase the amount of coverage. Other reasons for increasing insurance coverage could be a new car or boat purchase, family heirlooms and jewelry coming into your possession or outdoor investments such as a sprinkler system, hot tub or storage shed.

Increase your retirement contribution

  • Another year passing means we are all that much closer to retirement. Whether that brings you excitement or anxiety, or a healthy mix of both, the realization hopefully moves you to increase the amount you are saving for your golden years.

If you have any questions about the above list, please email your client relationship manager or the team at info@vcmi.net.

Written by Liz Swagerty Olsen · Categorized: FINANCIAL PLANNING, PERSONAL FINANCE, RETIREMENT PLANNING · Tagged: FINANCIAL ADVISOR, FINANCIAL PLANNING, RETIREMENT PLANNING, WEALTH MANAGEMENT

Dec 30 2022

Understanding the Secure Act 2.0

Secure Act 2.0

In 2023, the SECURE Act 2.0 for retirement savings becomes federal law, reshaping tax incentives for years to come by making numerous changes to existing retirement account rules and related tax breaks. Though there are many changes, below are some of the ones that will impact high wage earners, those still working, and those who have or are about to retire.

[Read more…]

Written by Maria Malloy · Categorized: 401K, 529 PLAN, FINANCIAL PLANNING, RETIREMENT PLANNING · Tagged: FINANCIAL PLANNING, IRA, RETIREMENT PLANNING

Mar 29 2022

Marriage and Social Security Retirement Benefits

Since Social Security benefits are often a substantial part of your cash flow during retirement, it’s important to understand how they can be impacted by marriage and divorce. Every relationship and financial situation is different, so it’s wise to be prepared to make well-informed decisions about your benefits. Marriage and Social Security Benefits [Read more…]

Written by Marina Johnson · Categorized: DIVORCE, FINANCIAL PLANNING, SOCIAL SECURITY · Tagged: FINANCIAL PLANNING, RETIREMENT PLANNING

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