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Vonore, TN 37885

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New Tax Planning Ideas with Secure Act 2.0

Wednesday, February 1st, 2023 | Uncategorized | No Comments

By Yvonne Marsh, CFP®, CPA

You’ve probably been reading about the retirement savings changes brought about by the passage of the Secure Act 2.0 in late December, so I won’t recap them all again here. Instead, let’s look for tax planning opportunities. How can we put this new law to your best use?

First, the easy one is that the Required Minimum Distribution (RMD) age was increased to age 73 if you’re born in the years of 1951 – 1959, and to age 75 if you’re born in 1960 or later. (If you were already subject to RMD’s, having been born in 1950 or before, there are no changes for you.) How does this help? More time for systematic multi-year Roth IRA conversions, of course? Remember, Roth conversions are how you move money your IRA to a Roth IRA, paying tax on the conversion, but then forever shielding the amount moved in a tax-free Roth account. Roth IRAs insulate you from future tax increases and provide a tax-free legacy for your heirs.

Second, a new beneficiary strategy is available that is advantageous if the surviving spouse is older than the deceased spouse. Starting in 2024, a spouse who inherits an IRA as a primary beneficiary will have the option to be treated AS the deceased spouse. Huh? Usually, most surviving spouses roll over the IRA and take RMD’s based on his/her own age. But by electing to be treated AS the deceased (younger) spouse, it creates a longer delay before RMD’s have to start, and when they do, they’ll be a smaller dollar amount. This could be a major tax savings.

There are more tax planning opportunities that are embedded in the Secure Act 2.0, and this is important stuff, so I’m hosting a Zoom call on Thursday February 9th at 10am EST. We’ll delve deeper into these ideas plus other features such as further “rothification” of 401k’s and an interesting twist on unused college 529 plan money rolling into Roth IRA’s. Join me for a lively conversation about the Secure Act 2.0, and I’ll leave time for questions too. I promise I’ll make it fun. Call or email our office and ask to have the Zoom link emailed to you to register.

Marsh Wealth Management, LLC
Fiduciary Registered Investment Advisor
504 Ebenezer Road
Knoxville, TN 37923
865.622.2162
www.marshwealth.com

Financial Planning & Investment Advisory Services are offered through Marsh Wealth Management, LLC (“MWM”), an independent investment advisor registered with the state of Tennessee. Yvonne Marsh is an Investment Advisor Representative of MWM in the state of Tennessee. Marsh Professional Group, LLC is a TN registered public accounting firm and a separate legal entity from MWM. For a detailed discussion of MWM and their investment advisory fees, see the firm’s Form ADV on file with the SEC at www.adviserinfo.sec.gov

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