Episode 031:
SECURE Act 2.0 for Retirees – What You Need to Know!


Episode 031 Summary:

Whether we’re talking about gall bladders or the SECURE Act 2.0, there’s really no such thing as over-sharing. Right? That’s why on this episode of Retirement Equals Freedom, Host Josh Bretl is diving deep into both topics!

In addition to finding out how he’s faring post-surgery, we’re also getting a thorough debrief on the many (in some cases subtle) new SECURE Act provisions adopted by Congress at the end of 2022 – many of which may impact how we manage our retirement accounts and other savings vehicles.

You’ll learn about an adjustment to age limits for required minimum distributions (RMDs) and why tax strategy is key to maximizing assets in retirement. It’s all about being proactive, says Josh: “I like when my clients have control and there’s nothing raining over that could spoil what we believe could be the best part of their lives.”

There’s something for everyone as Co-Host Dave Schmidt takes us into the finer points of his all-time favorite video games and ponders a photo tribute to the gall bladder polyps Josh’s astute doctor sent packing.

In addition to learning all the latest and greatest information about SECURE Act 2.0, you’ll enjoy another round of #Dave Relates to Retirees (aka DR2R) and find out which podcasts our hosts are loving these days.

And don’t forget to stay up on all the latest by signing up for the show’s weekly email at the bottom of this page!

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Explore the services that FSR Wealth Strategies offers and schedule a discovery call with one of the team’s CPAs. When it comes to living your best life, it’s never too early to get started!

Bone Valley. Revisionist History. Pizza Pizzazz. ToeJam & Earl.

Bone Valley. Revisionist History. Pizza Pizzazz. ToeJam & Earl.

Talking Points

Minus One Organ: Josh is back and better than ever. Feeling trim and grateful, he’s taking us behind the scenes on his gall bladder surgery!

Going to any baby showers? Josh and Dave share can’t-miss gift ideas (links below!).

If you’d like to do a refresher on the original SECURE Act, you’ll find everything you need to know by listening to episode 021 of the R=F pod.

The Basics:

  • SECURE Act 2.0 was passed December 29,2022.
  • The original SECURE Act moved the RMD (Required Minimum Distribution) from age 70.5, where it had been for decades, to age 72.
  • SECURE Act 2.0 (passed at the end of 2022) moved the RMD from 72 to 73.
  • In another decade, the age will move to 75.

Do you qualify for a reprieve?

  • If you turn 72 in 2023, you do not have to take an RMD.
  • If you turned 72 on Dec. 31, 2022, you’re out of luck and have to take an RMD.

Strategies for taking control and optimizing your financial future:

  • Taxes are a huge liability and variability in retirement.
  • Time = the ability to plan and sequence.
  • Planning ahead means understanding and taking advantage of tax bracket management.

Own It, Baby: About FSR’s “Own Your Retirement” planning process, whose elements include a tax management component.

Other SECURE Act 2.0 changes to consider:

  • The penalty for failing to take an RMD, which used to be 50% of the RMD + taxes owed, has been reduced to 25% and potentially down to 10%.
  • The penalty may be lower, but it will likely be waived altogether a lot less frequently, so first-time offenders shouldn’t count on any grace.
  • 401k catch-up contributions rules for 2023 have been adjusted and augmented:
    • People over 50 already qualified for $7,500 catch-ups for 401k contributions.
    • For people over 62, 63 or 64 in 2023, the catch-up amount now increases to $10,000 (for a total of $32,000 in contributions for the year).
  • Roth 401k privileges have also been adjusted:
    • Employers can now make matching contributions.
    • RMD rules have been eliminated.
  • Going forward, employers will be able to make contributions to workplace savings plans on behalf of employees who are still repaying student loans.
  • Unused 529 higher education savings funds can now be rolled into a tax-free Roth IRA account penalty-free:
    • Qualified accounts must be at least 15 years old.
    • The lifetime cap is $35,000.
  • The landscape for qualified charitable distributions as a vehicle for RMDs has expanded and promises to be beneficial for retirement planning!

Queue the Jingle: Time to get to know Josh and Dave!

  • Josh’s question: Can you recommend a podcast (not this one!) for our listeners?
  • Dave: That’s a tough call. He’s a huge fan of multiple shows, but gives his tip of the hat to Bone Valley, a masterful piece of storytelling about someone wrongfully convicted 35 years ago.
  • Josh: He is loving Revisionist History, the University of Chicago economist and bestselling author Malcolm Gladwell’s deep dive on a range of compelling current events and historical topics.

It’s Time for DR2R: Much like the changes associated with SECURE Act 2.0 are subtle, Dave’s two favorite video games (links below) are deceptively nuanced and demand attention! Josh likewise draws a parallel to his recent gall bladder surgery, which wouldn’t have taken place had his doctors not been alert and proactive – much as retirees will want to be when it comes to navigating changes to the SECURE Act.

The show leaves us with the promise of an Oscar-worthy email montage that may or may not include graphic images of Josh’s polyps. We’d like to thank the Academy.

Quotable Quotes

“Are you surprised that I’ve heard nothing about SECURE Act 2.0? I’m being somewhat facetious, but it seems pretty important yet no one’s talking about it!” ~Dave

“SECURE Act 1.0 got a ton of press. 2.0 did not. To be quite honest, it doesn’t have the sweeping changes that 1.0 had, but it is pretty massive ... We’re still digesting it, but there’s a lot in there.” ~Josh

“If you have questions about it, don’t wait (to talk to a financial advisor). The SECURE Act can make a major impact and have some significant benefits, too.” ~Josh

“The RMD change is really big … and good for most retirees.” ~Josh

“I like when my clients have control and there’s nothing raining over that could spoil what we believe could be the best part of their lives.” ~Josh

“(SECURE Act 2.0 changes) make 529s a little more valuable as well as giving some freedom and flexibility.” ~Josh

“(Bone Valley) is just so well done on every level. It’s heartbreaking. Infuriating. Uplifting. It’s everything!” ~Dave

“When a change occurs – and changes occur all the time – you are either going to take advantage of it or it’s going to take advantage of you.” ~Josh

“When you have that good advisor, you can make sure that something like SECURE Act 2.0 isn’t an oogie-boogie that’s going to come out and get you.” ~Josh

Episode Extras

About your Co-Hosts

A certified public accountant, Josh Bretl has spent the past two decades growing FSR Wealth Strategies into a firm that specializes in tax-focused retirement planning. Because taxes have the single biggest impact on how much you can spend in retirement, Josh is dedicated to developing individualized financial plans that extend and grow his clients’ retirement savings. Based in Elmhurst, Illinois, FSR Wealth strategically preserves and maximizes resources through tax-efficient strategies designed to fulfill retirement dreams.

Apart from producing and co-hosting The Retirement = Freedom Podcast, Josh's longtime friend Dave Schmidt is a content production and marketing adviser to local businesses and nonprofits. He’s also an advocate for t-shirts, all things 90s (especially the music), short walks and long naps. A serial “wallet forgetter,” Dave nonetheless swears that he has picked up the check on at least one or two meals with Josh over the years. Evidence pending.

Standard Disclaimer:
FSR Wealth Management is a registered investment advisor located in Elmhurst, Illinois. Information and opinions contained in this audio have been arrived at by FSR Wealth advisors. All information herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, a solicitation or recommendation to purchase any security. FSR is not providing legal, tax, accounting, or financial planning advice in this audio. These views are as of the date of this publication and are subject to change.

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