January 17, 2023—The new SECURE Act 2.0, which passed into law last month, may have far reaching implications on retirement planning in the U.S. This “sequel” legislation builds upon many of the themes found in the prior Act, such as expanding access to retirement accounts in cases of hardship and moving the age when required minimum distributions begin. In this podcast, Senior Wealth Strategist Ryan Davis of Wilmington Trust Emerald Family Office & Advisory® explains some of the more notable changes from SECURE Act 2.0 and their implications for high-net-worth individuals.
SECURE Act 2.0: What the new law may mean for you
Hi, thank you for tuning in and welcome to our Emerald Planning GEM podcast series. GEM is an acronym for Get Educated in Minutes. We created this podcast series to help you address some of your most pressing planning concerns in a timely, concise, and actionable manner. I’m Ryan Davis, a senior wealth strategist with Wilmington Trust’s Emerald Family Office and Advisory® and your host for today’s show. Today I’m going to answer the question: What should affluent and high-net-worth individuals know about the new SECURE Act 2.0?
It’s now 2023, and we are starting off the year with new legislation from Congress. Back in December, Congress passed the Consolidated Appropriations Act of 2023. While this legislation is intended primarily to fund the federal government, it contains a section devoted to retirement accounts titled SECURE Act 2.0. This legislation is a sequel to the SECURE Act of 2019 and builds upon many of the same themes found in the prior act: expanding access to retirement accounts in cases of hardship, incentivizing employers to offer retirement accounts, reducing punitive taxes and easing the administration of retirement accounts, and further pushing back the required minimum distribution date over time. The SECURE Act 2.0 has approximately 100 provisions, but today I’ll focus on a few that we believe are the most relevant to affluent and high-net-worth individuals.
As with the first SECURE Act, the new law makes numerous changes to the amount that can be contributed to retirement accounts, how those contributions are treated for tax purposes, and when distributions must come out of retirement accounts.
The new law also contains several provisions relevant to wealthier individuals who may benefit from more sophisticated planning techniques.
So, what could you be doing to prepare for the new law?
This new law is complex and has many nuances. We will likely receive more guidance in the coming months, and we’ll work to keep you informed on these developments.
Thanks again for joining us today. I hope you found our GEM to be helpful. Please contact your Wilmington Trust wealth advisor if you have any questions about Secure Act 2.0 and how it may affect planning and retirement accounts. We would be glad to help you. If you have a topic that you would like us to discuss on a future GEM, please let us know. Send an email to Emerald@wilmingtontrust.com. See you next time!
*SECURE 2.0 Act of 2022
**Notice 2022-55, Internal Revenue Service
Definition of Terms
Conservation easements: A voluntary, legal agreement that permanently limits uses of the land in order to protect its conservation values. The Internal Revenue Code permits charitable deductions for conservation easements.
Indexed for inflation: A number that is stated at a fixed value in a federal statute but is adjusted periodically by relevant federal agencies based on inflation statistics produced by the federal government. Inflation adjusted tax numbers are found in the Internal Revenue Code and adjusted periodically by the IRS.
Pass-through entities: A type of business organization that is differentiated from a C Corporation by the lack of two-levels of taxation. S Corporations, LLCs, and partnerships are all pass-through entities.
Qualified charitable distribution: A technique allowed by statute permitting an IRA owner to contribute funds directly to charities from their IRA in return for a charitable deduction.
Required minimum distribution: Payments from tax-deferred retirement accounts required by federal law at an age specified by statute.
Syndicated conservation easements: A syndicated conservation easement consists of a group of individuals or multi-tiered entities organized as a partnership or association formed to promote a common interest in order to carry out a particular transaction. From a tax perspective, a syndicated conservation easement revolves around making donations of conservation easements to certain organizations with the intention to benefit from corresponding tax benefits resulting from those transactions.
Wilmington Trust Emerald Family Office & Advisory® is a registered trademark and refers to wealth planning, family office and advisory services provided by Wilmington Trust, N.A., a member of the M&T family. Wilmington Family Office is a service mark for an offering of family office and advisory services provided by Wilmington Trust, N.A.
The information provided herein is for informational purposes only and is not intended as a recommendation or determination that any tax, estate planning, or investment strategy is suitable for a specific investor. Note that tax, estate planning, investing, and financial strategies require consideration for suitability of the individual, business, or investor, and there is no assurance that any strategy will be successful.
Wilmington Trust is not authorized to and does not provide legal or accounting advice. Wilmington Trust does not provide tax advice, except where we have agreed to provide tax preparation services to you. Our advice and recommendations provided to you are illustrative only and subject to the opinions and advice of your own attorney, tax advisor, or other professional advisor.
The information in this podcast has been obtained from sources believed to be reliable, but its accuracy and completeness are not guaranteed. The opinions, estimates, and projections constitute the judgment of Wilmington Trust and are subject to change without notice.
Third-party trademarks and brands are the property of their respective owners.
What can we help you with today