In December of 2022, the Secure 2.0 Act was signed into law as part of the 2023 Omnibus spending bill. The legislation resulted in a revised set of retirement rules with the primary goals of increasing retirement savings and to generally make qualified retirement plans more “user friendly” and accommodating to participant needs.
Some key provisions are:
Improved catch-up contributions for IRAs, 401(k)s and 403(b)s for participants aged 60 to 63.
Participants aged 60 to 63 will now have a catch-up contribution equal to the greater of $10,000 or 150% of the standard catchup contribution for 401(k)s, 403(b)s and IRAs (which will now be increased for inflation).
Beginning in 2023, SIMPLE IRAs and SEP IRAs will be able to include a Roth option.
Beginning in 2024, in certain circumstances, unused 529 plan funds may be rolled over to a Roth IRA.
The plan must have been open for at least 15 years.
Contributions made within the last 5 years are not eligible for rollover.
The rollovers are subject to the annual Roth IRA contribution limit.
A lifetime rollover transfer limit of $35,000.
Required minimum distribution (RMD) age increases.
As of January 1, 2023, if you are not yet age 72, the RMD age is now 73.
In 2029 the RMD age will become age 74 (if age 73 after 12/31/28) and 75
In 2033 the RMD age will become age 75 (if age 75 after 12/31/32).
Required minimum distributions (RMDs) will not have to be taken from Roth 401(k)s and Roth 403(b)s (workplace Roth accounts).
Prior to the passage of the act, RMDs were required from workplace Roth accounts. This was unlike individual Roth IRAs which did not require an RMD. Beginning in 2024, RMDs will not be required from workplace Roth accounts.
A financial strategy that prepares people to bequeath their assets to loved ones or charity after death.
These strategies are often planned and organized by a financial advisor.
The planning will usually include tax planning and the creation of wills and trusts dealing with the timing and any conditions of distributions to your heirs.
Legacy planning can extend beyond financial and legal document creation to include family meetings regarding family values, wealth planning education and stewardship of family wealth.
A yield curve is a graphical representation used to show the yield on bonds (of equal credit quality) over a range of maturity periods.
It plots bond yields (vertical axis) against maturities (horizontal axis).
Generally, longer maturities have higher yields than shorter maturities as investors want a higher return when they are taking longer term risks. This yield curve is usually upward sloping and gradually flattens out as maturities get longer.
However, the yield curve may be inverted when longer maturities have a lower yield than shorter maturities.
This indicates that an anticipated decrease in long-term interest rates over time is expected. Historically, theinverted yield curve has proven to be a reliable indicator of a recession.
The most widely used bond yield curve is for U.S. Treasuries. Its slope and shape measure investors' feelings about risk and the direction of the economy.
Life insurance can help a family cope with financial hardships that result from the death of a breadwinner: pay off a mortgage, secure a college education, provide income for a surviving spouse and children, etc. Certain types provide living benefits as well: tax free dividends, tax free withdrawals, cash when you need it (be your own banker!) and supplemental retirement income on a tax advantaged basis.
For businesses, life insurance can secure loans, recover the economic loss created by the death of a key employee, secure the benefits provided by executive benefit plans, fund shareholder buyout agreements (including family buyouts), etc.
What Type of Life Insurance is Right for Me?
Life insurance comes in many flavors: Whole Life, Term, Universal Life, Variable Universal Life, and Indexed Universal Life.
Which one is right for you? I’m sure you’ve guessed the answer: “It depends.” On what? Your objectives, tolerance for risk, health and age, and family or business circumstances, to name a few.