Our Family of Companies
western & southern financial group logo
western & southern life logo
columbus life logo
eagle realty group logo
Fabric by Gerber Life
fort washington logo
gerber life logo
integrity life logo
lafayette life logo
national integrity life logo
touchstone investments logo
w&s financial group distributors logo

SECURE Act 2.0

By Private Client Group
Wealth Management
u.s. capitol building

On December 29, 2022, the Consolidated Appropriations Act of 2023, a spending bill authorizing $1.7 trillion in Federal spending, was signed into law. Included in that bill was the retirement bill SECURE Act 2.0

The SECURE Act  was passed in late 2019. It had major changes, including eliminating the stretch IRA and changing the starting age for required minimum distributions (RMDs) from age 70.5 to age 72. The SECURE Act 2.0 includes more changes to RMDs and other impactful changes that are mentioned below.

Required Minimum Distributions (RMDs)

  • For individuals who turn 72 after 12/31/2022 and age 73 before 1/1/2033, the new RMD starting age is 73.
  • Individuals who turn age 74 after 12/31/2033, the new RMD starting age is 75.
Birth Year RMD Starting Age
1950 or before 72 (70.5 if the individual turned 70.5 before 2020)
1951-1959 73
1960 or after 75

  • Starting in 2023, the RMD shortfall penalty is 25%. If the shortfall is corrected within the “correction window”, the penalty is reduced to 10%.
    • The “correction window” is defined as the date that a tax penalty is imposed and ends upon the earliest of when the Notice of Deficiency is mailed to the taxpayer, when the tax is accessed by the IRS, or the last day of the second tax year after the tax is imposed.

Roth Accounts

  • RMDs for Roth accounts in qualified employer plans are eliminated beginning in 2024.
    • Previously, Roth accounts such as Roth 401(k)s, had RMDs, while Roth IRAs did not. No Roth accounts will have RMDs starting in 2024.
  • Previously, SIMPLE IRA and SEP IRAs had to be funded with pre-tax funds. In 2023, individuals can now have Roth SIMPLE and Roth SEP IRAs.
  • Employers can now make matching or non-elective contributions to employees’ designated Roth accounts.
  • Starting in 2024, individuals making more than $145,000 cannot fund catchup contributions with pretax funds. Their catchup contributions must be made to their Roth account.
  • Starting in 2024, individuals can move 529 plan money into a Roth IRA. There are, however, many conditions that must be met:
    • The Roth IRA receiving the funds must be in the name of the beneficiary of the 529 plan;
    • The 529 plan must have been opened for 15 years or longer;
    • Contributions made to a 529 plan within the last 5 years are not eligible to be moved to a Roth IRA (earnings on those contributions are included in the restriction);
    • The annual limit for how much can be moved from a 529 plan to a Roth IRA is the IRA contribution limit for the year, minus any traditional IRA or Roth IRA contributions that are made for the year;
    • The maximum amount that can be moved from a 529 plan to a Roth IRA during an individual’s lifetime is $35,000.

Plan Catch-Up Contributions

  • Starting in 2025, employer retirement plan catch-up contribution limits for participants who are age 60-63 will be increased to the greater of $10,000 or 150% of the regular catchup contribution amount (indexed for inflation) for plans in 2024.
  • Catchup contributions for SIMPLE plan participants age 60-63 will increase to the greater of $5,000 or 150% of the regular SIMPLE catch-up contribution amount for 2025 (indexed for inflation).

Information and opinions expressed are based on discussions and documentation provided to Fort Washington and are subject to change without notice. Tax information contained herein is not intended to be legal or tax advice. Consult a qualified tax advisor or attorney regarding specific circumstances. This publication has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy, or investment product. Information and statistics contained herein have been obtained from sources believed to be reliable and are accurate to the best of our knowledge. No part of this publication may be reproduced in any form, or referred to in any other publication, without express written permission of Fort Washington Investment Advisors, Inc.

Private Client Group

We are a team of wealth planners, portfolio managers, and relationship managers who are proactive in developing strategies that help you achieve your goals.
Frank Russell Company (FRC) is the source and owner of the Russell Index data contained or reflected in this material and all trademarks and copyrights related thereto. The presentation may contain confidential information pertaining to FRC and unauthorized use, disclosure, copying, dissemination or redistribution is strictly prohibited. This is a Fort Washington presentation of the Russell Index data. Frank Russell Company is not responsible for the formatting or configuration of this material or for any inaccuracy in Fort Washington’s presentation thereof.