On December 29, 2022, President Biden signed into law the 2023 omnibus appropriations bill. The bill contains a number of changes that could impact your financial plans.
Most are calling these provisions SECURE ACT 2.0 as they follow on or expand the provisions of the Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019.
We have gotten used to the annual increases in how much you can stuff into a retirement plan, but this first change will eventually affect everybody born in 1950 or later.
Increase in IRA/Employer Plan* RMD age
The age for required minimum distribution (RMD) from an IRA or employer retirement plan is increased to 73 effective on January 1, 2023, and again to 75 starting on January 1, 2033. (IRA/Employer Plan owners turning age 72 in 2023 would not be required to take RMDs in 2023.)
*Employer plans include 401(k)s, 403(b)s, 457s, the TSP, and other defined contribution plans.
Here is a chart so you can look up where you stand.
I'll be sending additional information covering many of the other provisions of SECURE ACT 2.0 in the coming weeks.