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Updates to Consider for Solos to Start the New Year, How to Take Advantage of the Secure Act 2.0, Ep # 171

As you move into the new year, you’ll want to start the year off right. This means planning for taxes and savings. In this episode, you’ll learn how to optimize your retirement savings by taking full advantage of the updates to your retirement plans provided by the Secure Act 2.0. Listen in to hear what you can be doing to maximize your savings.

You will want to hear this episode if you are interested in…

  • The Secure Act changes taking place [1:22]
  • Required minimum distributions [4:33]
  • Catching up on catch-up contributions [7:32]
  • Changes to 529 plans [10:01]
  • Paying off student loans [11:46]
  • Using hardship withdrawals [12:44]

The Secure Act 2.0 goes into effect soon–make sure you’re ready

In 2019, Congress passed the Secure Act which changed the way Americans saved for retirement. In 2022 Congrees updated the act to create the Secure Act 2.0 which goes into effect on January 1, 2024.

The Secure Act 2.0 is meant to make saving even easier than before. It covers hardship withdrawals, emergency savings, and balancing expenses.

Starting in 2025, eligible companies will automatically enroll their employees into 401K retirement plans. If you are a solopreneur, this probably doesn’t apply to you, but if it does, then you’ll need to set a reminder for yourself to create a workflow that will automatically do this for your employees. As an employer, you’ll want to follow the law so that you don’t get into trouble.

Retirement withdrawals are changing

Another way the law has changed is by increasing the age of required minimum distributions (RMDs). RMDs are the minimum amount that you must take out of your IRA so that the IRS can collect the taxes. In 2023 the minimum age for RMDs is 73, this age will increase to 75 over the next years.

Even if you aren’t at retirement age, you can start planning your retirement withdrawals so that you can take advantage of being in lower tax brackets. You won’t want to arrive at your RMD age and discover that you have to take out more money than you’ll need. Proper advanced planning can ensure that you only have to take out as much as you’ll need to live on. Learn how important it is to plan your retirement withdrawal strategy.

Now you can really catch up on saving

Another change to the Secure Act is the increase in the amount of catch-up contributions to 401K and Roth IRAs. This year the maximum amount you can contribute to a Roth IRA at age 50+ is $7,500, This amount will jump to $10,000 in 2025.

If you still have student loans you’ll want to make sure to listen to hear how your company can now help you pay them off faster. Listen in to learn how the Secure Act 2.0 will change the way you save for retirement and beyond

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