--- title: The SECURE Act 2.0 Retirement Income Planning Opportunities description: The SECURE Act 2.0 is a major piece of legislation that offers a number of benefits for retirement savings and small business growth. image: https://www.covisum.com/hubfs/Adviser%20giving%20handshake%20to%20clients.jpeg --- [Login](https://www.covisum.com/login-experience) | [Call: 402-235-4500](tel:1-402-235-4500) | [Contact Us](https://www.covisum.com/contact) ** [![covisum-logo](https://www.covisum.com/hs-fs/hubfs/covisum-logo.png?width=264&height=41&name=covisum-logo.png "covisum-logo")](https://www.covisum.com/) [![Start Your Free Trial](https://no-cache.hubspot.com/cta/default/2755909/b23743cd-d0df-4907-a66d-293b58ab1164.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/b23743cd-d0df-4907-a66d-293b58ab1164) [![Contact Us](https://no-cache.hubspot.com/cta/default/2755909/6c6d7fe7-e094-4fc0-9c82-d93d4ccbb532.png)](https://cta-redirect.hubspot.com/cta/redirect/2755909/6c6d7fe7-e094-4fc0-9c82-d93d4ccbb532) # The SECURE Act 2.0 Retirement Income Planning Opportunities [ROTH  |  ](https://www.covisum.com/blog/topic/roth)1/9/23 8:30 AM  |  by [Katie Godbout, Vice President of Sales & Marketing](https://www.covisum.com/blog/author/katie-godbout-vice-president-of-sales-marketing) ## Updated Legislation Means More Changes That Advisors Need To Know The SECURE Act 2.0 is significant legislation signed into law on December 20, 2022, and is expected to have several impacts on retirement income planning. It contains several provisions designed to improve Americans' retirement security, including later required minimum distributions (RMDs), 529-to-Roth rollovers, and other tax planning opportunities. ## Required Minimum Distributions One of the most significant changes in the [SECURE Act 2.0](https://www.finance.senate.gov/imo/media/doc/Secure%202.0_Section%20by%20Section%20Summary%2012-19-22%20FINAL.pdf) is extending the age at which RMDs must begin. [The original SECURE Act](https://www.covisum.com/blog/the-secure-act) increased the RMD age from 70 ½ to 72. SECURE 2.0 phases in further increases. For people born between 1951 and 1959, the RMD age increases to 73. For people born in 1960 or later, RMDs must begin at age 75.   This change is especially beneficial for those still working over age 72 who do not need to tap into their retirement savings yet. It also allows individuals to continue to benefit from the tax-deferred growth of their retirement accounts, potentially resulting in a bigger nest egg in the long run. At the same time, the change represents a double-edged sword for those who have heavily saved into IRAs and 401ks. When retirement account distributions are forced into a shorter period, the annual distribution will be more significant, pushing more money into higher tax brackets.  This fact represents a significant planning opportunity for advisors to use Roth conversions or blended distributions from IRA accounts earlier in retirement to level the client's effective tax rate and lower their total lifetime tax bill.    ## 529 College Savings Plan + Roth IRAs Another significant change in the SECURE Act 2.0 is the ability for individuals to roll over their 529 college savings plan funds into a Roth IRA. Before the passage of the SECURE Act 2.0, individuals could only roll their 529 funds into another 529 plan or use them for qualified education expenses. Moving over 529 funds into a Roth IRA offers several benefits. For one, Roth IRAs offer tax-free growth and withdrawals if specific requirements are met. Any increase in the Roth IRA resulting from the rollover of the 529 funds will not be subject to taxes when it is withdrawn in retirement. Additionally, the Roth IRA offers more flexibility regarding how the funds can be used. While 529 funds can only be used for qualified education expenses, Roth IRA funds can be used for various purposes, including retirement, home purchases, and even certain medical expenses. ## Tax Planning The SECURE Act 2.0 also includes several other provisions that can be useful for tax planning purposes. For example, the Act increases the maximum contribution limit for 401(k)s, making it easier for individuals to save more for retirement. It includes a provision that allows small employers to offer annuities as part of their retirement plans, providing another option for retirement income. [Try Tax Clarity for Free Today!](https://www.covisum.com/free-trial) ## Small Businesses In addition to the provisions related to retirement savings, the SECURE Act 2.0 also includes several requirements designed to encourage small business growth. These include a credit for start-up expenses, a credit for businesses that offer paid family and medical leave, and a credit for companies that provide apprenticeships. Overall, the SECURE Act 2.0 is a significant piece of legislation that offers several benefits for retirement savings and small business growth. The later RMD age and the ability to roll over 529 funds into a Roth IRA are particularly significant changes that can significantly impact retirement planning and represent a terrific marketing opportunity for advisors. By taking advantage of these provisions, individuals can build a more substantial nest egg and enjoy greater tax benefits in retirement. It's a good idea for advisors and tax professionals to offer to consult with consumers to determine how these provisions may impact their specific situation and how to best take advantage of them. 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