Arrowroot Family Office
  • Home
  • Services
    • Multi Family Office Services
      • Accounting
      • Tax Efficiency
      • M&A Advisory
      • Wealth Strategy
      • Family Governance
      • Philanthropic Initiatives
    • Wealth Management Services
      • Investment Management
      • Individual Retirement Account (IRA)
      • 529 Plan
      • Corporate Retirement Plan
    • Financial Planning Services
      • Financial Planning
      • Retirement Planning
      • Estate Planning
      • Tax Planning
    • GUIDELINES TO FINANCIAL FREEDOM

  • Offices
    • Southern California
    • Northern California
    • Michigan
    • Virginia
  • Team
  • About Us
  • Contact
Search
  • Home
  • Services
    • Multi Family Office Services
      • Accounting
      • Tax Efficiency
      • M&A Advisory
      • Wealth Strategy
      • Family Governance
      • Philanthropic Initiatives
    • Wealth Management Services
      • Investment Management
      • Individual Retirement Account (IRA)
      • 529 Plan
      • Corporate Retirement Plan
    • Financial Planning Services
      • Financial Planning
      • Retirement Planning
      • Estate Planning
      • Tax Planning
    • GUIDELINES TO FINANCIAL FREEDOM

  • Offices
    • Southern California
    • Northern California
    • Michigan
    • Virginia
  • Team
  • About Us
  • Contact
AFO2023-01-26T05:54:14+00:00

New Retirement Rules have goodies for everyone!

The Secure Act 2.0 passed the Senate at the very end of 2022, and there is something for everyone in there. Many of the new regulations go into effect over the next few years but a few are immediate.

First, the new requirement minimum distribution (RMD) age is 73. This is up from 72 last year, allowing your retirement funds to grow another year tax-deferred, which can be a great boon to many retirees. The RMD age will edge up to age 75 in 2033. With people living longer, this may help ensure that you won’t outlive your money. In addition, the penalty for failing to take out your RMD has dropped from 50% to 25%.

A later RMD age allows many to do some tax planning as they may be in a lower tax bracket after retirement but before they must take money out of their IRAs. Because social security is taxed differently than regular income, many find themselves in low tax brackets for several years. It is a great time to take advantage of these tax advantages with careful planning.

Another helpful strategy may be a ROTH IRA conversion. It can be done during low tax years, sheltering income from future taxation as Roth IRAs are not subject to RMDs. If you do decide to try a ROTH IRA conversion, you should make sure you are working with your financial advisor and accountant to ensure you are following all the rules.

Another interesting tidbit in the Secure Act 2.0 is in regard to College Savings Accounts called 529 plans. After 2024, if you have money left in a 529 plan that you will not be used for educational purposes, you can roll it into a ROTH IRA for the beneficiary. There are limitations to how much your can rollover, how long the accounts need to be in existence, and how much you can convert each year. However, this can be a wonderful way to set up a child for a secure retirement. Imagine if your parents set up a tax-free fund when you were 22! A $6,000 investment growing at 6% over 40 years would grow to over $60,000. In the past, any money withdrawn from a 529 plan not used for higher education purposes was taxed as ordinary income and penalized 10%. Depending on which 529 plan you utilize; you could get a state income tax deduction as welll. A win win!

Another goody in the Secure Act 2.0 are increases in the catch-up provisions which allow people 50 years and older to set aside additional dollars beyond the standard maximum contributions to workplace retirement plans (such as 401(k)s) and IRAs. Several important changes were included in the SECURE 2.0 Act in regards to catch-up provisions. The first bumps the maximum additional amount that can be contributed to a workplace plan if you’re age 50 and older from $6,500 per year to $7,500 per year, effective in 2023. In addition, if you’re ages 60 to 63, you’ll be able to add $10,000 more per year above the standard limit beginning in 2025. However, if you earn more than $145,000 your catch-up provision will have to be on an after- tax basis. Beginning in 2024, catch-up contributions to IRAs, currently limited to $1,000 per year, will be adjusted for inflation in increments of $100.

There are a lot of other goodies in the Secure Act 2.0 for workplace retirement plans, incentives for both employers and employees, as well as incentives for people paying off student loans. This year may be a good time to do a deep dive tax review.

Blogs, Retirement

Share this post

Facebook Twitter LinkedIn Email WhatsApp

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *


Related Posts

01AprApril 1, 2022

Secure Act 2.0 Would Benefit Many Retirees And Young People​

SECURE ACT 2.0 WOULD BENEFIT MANY RETIREES AND YOUNG PEOPLE The second Secure Act (H.R. 5954) has passed the House in... read more

Trust and Estate Planning: All You Need to Know​
16JanJanuary 16, 2023

Trust and Estate Planning: All You Need to Know

Trust and Estate Planning: All You Need to Know Estate planning is the process of creating a comprehensive plan that designates... read more

06NovNovember 6, 2022

Retirement: Overview, Purpose, Benefits and Types

Retirement: Overview, Purpose, Benefits and Types Retirement is often referred to as the time an individual chooses to permanently or semi-permanently... read more

A Guide to Different Types of Retirement Plans for Small Businesses​
22NovNovember 22, 2022

A Guide to Different Types of Retirement Plans for Small Businesses

A Guide to Different Types of Retirement Plans for Small Businesse Owners Retirement for Business Owners Retirement is a common occurrence for... read more

How to Choose a Right Retirement Plan​
08NovNovember 8, 2022

How to Choose a Right Retirement Plan

How to Choose a Right Retirement Plan Retirement Overview Retirement is when an individual chooses to permanently or semi-permanently leave the workforce.... read more

LEARN HOW!

Services

Links

Newsletter

  • 4553 Glencoe Ave, Suite 201, Marina del Rey, CA 90292
    (310)566-5865
  • 2 Boars Head Ln, Suite 110, Charlottesville, VA 22903
    (626) 712-2090
  • 1264 Hawks Flight Ct Suite 290, El Dorado Hills, CA 95762
    (916) 384-0050
  • 725 Barclay Circle, Suite 125, Rochester Hills, MI 48307
    (248) 453-5252
  • Investment Management
  • 529 Plan
  • IRA
  • 403(b)
  • 401(k)
  • Corporate retirement
  • Retirement Planning
  • Tax Planning
  • Estate Planning
  • Financial Planning
  • M&A Mergers
  • Arrowroot Capital
  • CPA Partnership
  • Press Releases
  • Careers
  • Blogs
Arrowroot Family Office LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not constitute an endorsement by the SEC, nor does it imply that AFO has attained a certain level of skill or ability. Content should not be construed as legal or tax advice, AFO is not engaged in the practice of law or accounting.

Form ADV Part 1.pdf

Form ADV Part 2.pdf

Form CRS

    Terms & Condition | Privacy Policy | Web Accessibility

Copyright © 2022 Arrowroot Family Office – All rights reserved.

Services

Links

  • 4553 Glencoe Ave, Suite 201, Marina del Rey, CA 90292
    (310)566-5865
  • 2 Boars Head Ln, Suite 110, Charlottesville, VA 22903
    (626) 712-2090
  • 1264 Hawks Flight Ct Suite 290, El Dorado Hills, CA 95762
    (916) 384-0050
  • 705 Barclay Circle, Suite 125, Rochester Hills, MI 48307
    (248) 453-5252
  • Investment Management
  • 529 Plan
  • IRA
  • 403(b)
  • 401(k)
  • Corporate retirement
  • Retirement Planning
  • Tax Planning
  • Estate Planning
  • Financial Planning
  • M&A Mergers
  • Arrowroot Capital
  • CPA Partnership
  • Press Releases
  • Careers
  • Blogs

Newsletter

Arrowroot Family Office LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not constitute an endorsement by the SEC, nor does it imply that AFO has attained a certain level of skill or ability. Content should not be construed as legal or tax advice, AFO is not engaged in the practice of law or accounting.

Form ADV Part 1.pdf

Form CRS

Form ADV Part 2.pdf

    Terms & Condition | Privacy Policy | Web Accessibility

Copyright © 2022 Arrowroot Family Office – All rights reserved.

  • 4553 Glencoe Ave, Suite 201, Marina del Rey, CA 90292
    (310)566-5865
  • 2 Boars Head Ln, Suite 110, Charlottesville, VA 22903
    (626) 712-2090
  • 1264 Hawks Flight Ct Suite 290, El Dorado Hills, CA 95762
    (916) 384-0050
  • 705 Barclay Circle, Suite 125, Rochester Hills, MI 48307
    (248) 453-5252

Services

  • Investment Management
  • 529 Plan
  • IRA
  • 403(b)
  • 401(k)
  • Corporate retirement
  • Retirement Planning
  • Tax Planning
  • Estate Planning
  • Financial Planning

Links

  • M&A Mergers
  • Arrowroot Capital
  • CPA Partnership
  • Press Releases
  • Careers
  • Blogs

Newsletter

Arrowroot Family Office LLC is a registered investment adviser with the U.S. Securities and Exchange Commission (“SEC”). Registration with the SEC does not constitute an endorsement by the SEC, nor does it imply that AFO has attained a certain level of skill or ability. Content should not be construed as legal or tax advice, AFO is not engaged in the practice of law or accounting.

Form ADV Part 1.pdf

Form ADV Part 2.pdf

Form CRS

    Terms & Condition | Privacy Policy | Web Accessibility

Copyright © 2022 Arrowroot Family Office – All rights reserved.

Please note that you are exiting Arrowroot Family Office's website and entering one of a separate company. Arrowroot Family Office does not recommend or confirm any information on this site. Please read all disclosures on Arrowroot Family Office's website and that of the company's page you are about to enter. Continue Cancel