On December 29, 2022, President Biden signed into law the Consolidated Appropriations Act, 2023,
an omnibus spending bill that includes the SECURE 2.0 measure (a.k.a. the Securing a Strong
Retirement Act 2.0). Broadly, SECURE 2.0 is intended to make retirement saving more straightforward
and accessible to a wider range of people. As such, it encompasses many aspects of financial planning
and retirement saving.
With time, as the new law is interpreted and applied, nuances will become clearer. Until then, individuals
will have to interpret the law’s effects based on its language and any guidance the IRS issues.
SECURE 2.0 includes a host of provisions affecting the rules for qualified retirement plans (401(k),
403(b), etc.) and their administration. This article, however, addresses only key provisions pertaining to
individual retirement savers (or accounts) and rules applicable to individuals rather than plan sponsors
and administrators. The bill is quite broad (more than 4,000 pages), so we intend this article to be a highlevel
summary addressing the items most likely to affect individuals.
Key Provisions of SECURE 2.0 Relating to Individuals
SECURE 2.0 includes many provisions outside the scope of this summary that could be deemed relevant
for certain individuals, however, so it’s important to confer with a tax professional before executing any
strategy based on this new legislation. Note as well that the bill has a wide range of effective dates for the
various provisions.
Many of the provisions that make up SECURE 2.0 are designed to allow individuals more time for taxdeferred
saving and savings growth before requiring distributions and to incentivize and
promote retirement saving.
To potentially counter some of the lost revenue associated with tax deferral, SECURE 2.0 includes a
provision designed to limit tax benefits related to a strategy the IRS says runs afoul of the tax code. As
such, individuals engaged in “risky” tax strategies (e.g., use of a tax deduction through contribution to a
charitable easement) should use extra caution and seek appropriate counsel before
executing the strategy.
What’s Not in the Bill
Prior bills presented in Congress sought to limit the ability of taxpayers to engage in Roth conversions
and what is known as the Backdoor Roth conversion. SECURE 2.0 did not address these items, and
therefore, Roth conversion strategies should remain viable.
Additionally, the bill does not address the confusion surrounding inherited retirement accounts and
whether RMDs would apply to a beneficiary each year. Such final regulations to the original
SECURE Act remain pending.
Securing a Path to Retirement
As more information becomes available regarding the interpretation of SECURE 2.0, it’s important to
continue to review all aspects of your financial plan and tax strategies to ensure that you understand
how you and your family have been affected. Be sure to contact your tax professional or our office for
help navigating your situation.
This material has been provided for general informational purposes only and does not constitute either
tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful,
we recommend you consult a tax preparer, professional tax advisor, or lawyer.
Gino Molettieri
Lumen Wealth Management
55 Walkers Brook Drive | Suite 301 | Reading, MA 01867
781.247.5918 | 781.998.0705 fax | www.lumenwealth.com | gino@lumenwealth.com
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