The SECURE Act 2.0: Important Considerations for Physicians

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Some more sausage was made at the very end of last year in our esteemed houses of Congress: the SECURE Act 2.0.

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This law has nearly 100 different provisions and at 400 pages, I’m not sure anyone who voted either for or against it had any idea what was actually in the bill. But it squeaked through two days before the end of 2022.

There are several changes to retirement account regulations as a result of the SECURE Act 2.0, and this guest post from Forme Financial walks you through the provisions most significant to physicians and other high-income individuals. Without further ado…

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Roth-Related Changes

Catch-up contributions are amounts that individuals over the age of 50 can contribute to their retirement plan to essentially “catch up” on retirement savings. For example, in 2023, those under 50 years old have a maximum contribution limit of $6500 to their Roth IRA.

Individuals over 50 can contribute a total of $7500, allowing them a “catch-up” contribution of $1000 more. Every year prior, the catch-up contribution limit to an IRA was $1000 over the contribution limit.

Catch-up contributions have been allowed for years in employer plans such as 401(k)s. Currently, the catch-up limit is $7500. Beginning in 2025, those who are 60 – 63 years old will be able to make an additional annual contribution in their employer plans of up to $10,000 (indexed to inflation).

The initial SECURE Act of 2019 increased the required age for taking RMDs to 72. The SECURE Act 2.0 raises the age limit to 73 in 2023 and 75 in 2033. This means that people can wait longer to start withdrawing the annual minimum amount from their traditional IRAs and 401(k)/403(b)s.

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