The Secure Act 2.0 has been signed into law and brings with it several provisions aimed at increasing retirement savings and providing more Americans with a secure stream of retirement income.
Of the upcoming changes, which take effect in a staggered way in the years to come, there are a few that will be most impactful for Americans planning for retirement:
2023: Changes to RMDs
The original Secure Act raised the age for required minimum distributions from retirement accounts from 70½ to 72. Secure 2.0 will raise it to age 73 as of 2023, and then adjust again to age 75 starting in 2033.
In addition, the income tax penalty for failure to take an RMD has been reduced from 50% to 25%, and further reduced to 10% if mistakes are rectified in a timely fashion.