In late December, the SECURE 2.0 Act was signed into law which continues the overhaul of the nation’s retirement system that began in 2019. There are several notable provisions which may affect you. Here are some of the highlights that you need to know:
Beginning in 2023, you do not need to begin taking a Required Minimum Distribution (RMD) until April 1 of the year you turn 73. Secure 2.0 provides a scale so that ultimately, RMDs will not be required until age 75, as follows:
Born 1950 or earlier…No change
Born 1951-1959…RMD begins at age 73
Born 1960 or later…RMD begins at age 75
If you fail to take your RMD by the annual deadline of April 1 of the year you turn 73 for the first RMD and December 31 for all subsequent RMDs, they are subject to penalties. However, Secure 2.0 has reduced this tax from 50% of the missed RMD to 25%. In addition, the new law allows you to reduce the tax to 10% if the RMD is subsequently taken within a certain time period and an updated tax return filed.
Beginning in 2025, Secure 2.0 allows for additional catch-up contributions for those ages 60 through 63. For 401(k) plans, the catch-up contribution increases from $7,500 (in 2023 and 2024) to $10,000. The amount will be indexed for inflation.
As of December 29, 2025, Secure 2.0 permits retirement plans to distribute $2,500/year for premium payments for long-term care (LTC) contracts for the plan beneficiary, their spouse and some other family members. Further, these distributions can be taken early without the 10% penalty.
These are just some of the important changes to the retirement laws benefitting older adults.
Contact our office at 631.390.5000 to schedule your appointment to review your retirement and estate planning.
Jennifer B. Cona, Esq. is the Founder and Managing Partner of Cona Elder Law, an award-winning law firm concentrating in the areas of elder law, estate planning, special needs planning, estate administration and litigation, and health care law. The firm has been ranked the #1 Elder Law Firm by Long Island Business News for eight consecutive years. For additional information, visit www.conaelderlaw.com.
Originally printed in February 2023 issue of Long Island Press.
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