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SECURE ACT 2.0: What you need to know for 2023

SECURE ACT 2.0: What you need to know for 2023

February 15, 2023


There's so much information (nearly 400 pages) regarding the Secure Act 2.0, the law passed by Congress and signed by President Biden at the end of 2022.  The Act makes substantial changes to both qualified retirement plans and IRAs.  I wanted to break down for you the major changes that will be happening just this year.

2023 Key Provisions

The RMD age is now 73

We often have clients that do not need to take their Required Minimum Distributions (RMDs).  Now clients do not have to take their RMD's until age 73.

  • If you were born in 1950 or earlier, you will you still use age 72 (pre-2020 was 70 ½)
  • Use age 73 if born 1951 to 1959
  • You will be able to use age 75 if born 1960 or later 

Reduced RMD Penalty

Before Secure 2.0, the penalty for not taking an RMD was 50% of your RMD amount.  The penalty has now been reduced to 25%, further reduced to 10% if there is a timely correction and a client takes the missed RMD.  Mistakes happen, and the 50% penalty was often seen as harsh.

Emergency Withdrawals for Disaster Relief 

As a last resort, clients can take withdrawals of up to $22,000 from their employer retirement accounts or IRAs, as permitted, for individuals affected by a federally declared disaster.  Any emergency related withdrawals are permitted for disasters occurring on or after January 26, 2021.

SIMPLE Roth IRAs and SEP Roth IRA's

Long overdue, the Secure 2.0 allows Roth options for SIMPLE Plans and SEP IRAs. Starting in 2023 plans can allow employees to elect Roth employee contributions once it is set up by the plan sponsor or employer.

Larger Tax Credits for Businesses Starting Retirement Plans

Businesses can now have 100% of administrative costs, and receive a credit, up to $5,000, for establishing retirement plans when their company has 50 or less employees.  Previously, this credit was 50%. An additional credit of up to $1,000 per employee for eligible employer contributions may apply to employers with up to 50 employees, and it phases out from 51 to 100 employees.

Incentivize Employees to participate in Company Retirement Plan

Now employers can offer incentives for boosting employee participation in their retirement plans.  They can offer gift cards or other financial rewards to motivate employees to sign up for their retirement plan.

New Solo 401ks can be established and funded the following year

Retroactive first plan year elective deferrals for sole proprietors without employees permitted (new plans only).

Updated IRA Qualified Charitable Distributions

Individuals who are age 70½ and older may elect as part of their QCD limit a one-time gift up to $50,000, adjusted annually for inflation, to a charitable remainder unitrust, a charitable remainder annuity trust, or a charitable gift annuity.


There are many more rules.  To see more for years 2024 and beyond, please click here. It is a lot to cover in one article, so if you have any questions please feel free to reach out to the team at Impel Wealth Management to talk to one of our CERTIFIED FINANCIAL PLANNERS.  We would love to hear from you and help everyone keep “Moving Life Forward.”

© 2023 Irene Zurowski

The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein.  Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed.  Past performance does not guarantee future results.