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EXPOSURE

By KRISTIN HOVENCAMP

In 2019 Congress passed the Setting Every Community Up for Retirement Enhancement (SECURE) Act to spotlight long-term retirement savings programs. The Act changed various retirement account rules and financially impacted Americans at every age. The most notable revisions were raising the age of Required Minimum Distributions (RMDs) and eliminating age limits for traditional IRA contributions.

Building upon the 2019 broad legislation, Congress recently signed The SECURE Act 2.0. The law went into effect at the end of 2022. The new Act is Washington’s most recent move to encourage individuals and employers to better prepare for retirement. The Act aims to improve access to retirement plans and savings, simplify administration and reporting requirements, and preserve retirement assets.

Though the SECURE Act 2.0 contains over 92 new retirement savings provisions. A key takeaway is the significant adjustments made to the RMD rules. The age at which individuals must begin taking RMDs increased from 72 to 73 starting January 1, 2023, and 75 effective January 1, 2033. This change allows retirement assets to grow tax-deferred for an additional year.