The passage of the SECURE 2.0 Act of 2022 includes new updates for retirement plans, including IRAs. While Self-Directed IRAs allow you to invest in different types of assets, the same IRS rules and regulations apply. Here’s what you need to know.
SECURE 2.0 ACT of 2022
Effective 2023
Required Minimum Distribution (RMD) Age Increased to 73
Effective in 2023, the year in which individuals are required to start taking RMDs from their tax-deferred retirement accounts increased from age 72 to age 73 (i.e., Traditional, SEP & SIMPLE IRAs). So, if an individual will be 72 years-old in 2023, you are NOT required to take an RMD for the 2023 tax-year.
Effective in 2033, the year in which individuals are required to start taking RMDs from their tax-deferred retirement accounts will increase to age 75.
Failure to take RMD Penalty Decreased to 25%
Effective in 2023, the penalty for failure to take a RMD has been reduced from a 50% excise tax to a 25% excise tax of the amount that should have been distributed. If a correction is made to remedy the situation in a timely manner, the penalty is reduced from 25% to a 10% excise tax.
Treatment of Prohibited Transactions
Under the current law, if an IRA owner engages in a prohibited transaction, the IRA is disqualified. The new bill limits the disqualification to the IRA involved.
Effective 2025
Higher catch-up contribution for individuals who are ages 60-63
For more information about the future impact of this catch-up contribution increase, please refer to the Secure 2.0 Act bill summary.
Effective 2027
Saver’s Match
If you are a SIMPLE IRA account owner, please refer to the Secure 2.0 Act bill summary for further information.
For more information on the other impacts of the SECURE Act 2.0 legislation, please refer to the bill summary or visit irs.gov.
