SECURE 2.0 Act Changes in Effect in 2024

The SECURE 2.0 Act was a significant piece of legislation bringing about substantial changes to the retirement account rules in the United States, in the hopes that it would encourage more workers to save for their retirement. However, some of the complex changes have confused some taxpayers. Here’s some key points of the law that will come in to play in 2024:

RMD age change. The RMD age was increased to 73 in 2023, and remains the same in 2024.

RMDs and Roth 401(k)s. The RMD requirement for qualified employer Roth plan accounts has been eliminated beginning in 2024.

Emergency expense distributions. Beginning in 2024, you will be allowed to take an early “emergency” distribution of up to $1,000 per year from your retirement account to cover unforeseeable or immediate financial needs. This distribution won’t be subject to the usual additional 10% tax that applies to early distributions. If you choose to not repay the distribution within a certain time, you won’t be able to take other emergency distributions for three years.

Employer fund match for student loan payments. Your employer can make a matching contribution to your retirement plan account based on your student loan payment amount. This is designed to address the fact that high student loan debt can keep people from saving for retirement.

Roth rollover option for 529 plans. Money in a 529 account can be rolled over tax-free into a Roth IRA if the 529 account has been open at least 15 years. Annual limits for the rollover are within the annual contribution limit and there is a $35,000 lifetime limit on rollovers.

Check with your financial professional for updates. Information contained herein is current as of 2/28/2024. It is subject to legislative changes and is not intended to be legal or tax advice. Consult a qualified tax advisor regarding specific circumstances. This material is furnished “as is” without warranty of any kind. Its accuracy and completeness is not guaranteed and all warranties expressed or implied are hereby excluded.