This week’s theme on the Retirement Quick Tips Podcast is: SECURE 2.0 Act & The BIG Changes You Need To Know

Today, I’m talking about some of the other key provisions from Secure 2.0 Act. Previously this week, I’ve focused on some of the provisions most likely to impact you, but this is a big piece of legislation with many other key provisions as well. Here are just a few additional ones that might apply to you: 

• Emergency savings account - Beginning in 2024, employers can establish an emergency savings account where employees can save up to $2,500 in a Roth-style account. Distributions will be treated like a qualified distribution from a Roth account (tax-free if requirements are met).

• 529 Plan Rollovers to Roth IRAs - Starting in 2024, beneficiaries of 529 plans may roll over up to $35,000 during their lifetime to a Roth IRA. The rollovers will be subject to annual contribution limits and the 529 plan must have been open for more than 15 years.

• Exemption from 10% early withdrawal penalty for 401k hardships - In case of financial hardship, up to $1,000 may be withdrawn per year, penalty free, from a 401(k) or IRA. The employee has the option to repay the distribution within 3 years. No further distributions will be permitted during the repayment period unless the distribution is paid in full.

• Reduced penalty on RMD failures - Reduced excise tax for failure to take required distributions from 50% to 25%.

• Lost & Found database - The Labor Department will create a national online searchable lost and found database.

As you can see, the SECURE 2.0 Act has a lot of different provisions, and hopefully this week I’ve raised your awareness of what these key provisions are & how they might apply to you, so you can use these changes to your advantage when saving and planning for your own retirement. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast.    

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