SECURE 2.0 Can Make Clients’ Retirement Plans Stronger

What You Need to Know

  • Many Secure 2.0 provisions involve Roth IRAs.
  • Some involve protection against longevity risk.
  • One wrinkle: The Tax Cuts and Jobs Act of 2017 individual tax provisions expire in 2025.

Parents out there may relate to this: I was at my daughter’s softball game last summer.

After heavy rainfall, my son decided to jump in every puddle on the way to the field.

After I cleaned him up the best I could, I finally sat down, only to look over at him rolling around in the biggest, sloppiest mud puddle he could find.

In a way, Washington does this to financial planners every year.

Once we feel we have a handle on the financial planning landscape, Washington decides to make a change.

Savvy financial professionals have an opportunity to navigate the changes and highlight their value to clients.

Change can present opportunities.

Navigating SECURE 2.0

There are nearly 100 provisions within SECURE 2.0 that can impact your clients’ financial plans.

While some of these changes may seem minor, sometimes the smallest details make the biggest difference.

Here are a few provisions I’m keeping my eye on:

1.  RMDs

The SECURE 2.0 Act has once again put a spotlight on RMDs.

Changing the distribution age to 73 (or 75, depending on their current age) gives financial professionals an outlet to discuss strategies for clients who don’t like the idea of being forced to take distributions from their accounts.

Clients may be coming into your office wondering if they are able to delay their RMD for another year. This can be confusing given the new legislation.

A handy rule of thumb is that individuals born in 1950 or earlier will hit RMD age at 72. They are locked in for RMDs going forward.

Individuals born between 1951 and 1959 can delay their RMDs until age 73.

Those born in 1960 and later have the option to wait until age 75.

Though there may be benefits to delaying RMDs, the condensed timeframe may make distributions bigger and include more taxable income. This can potentially create taxable issues for your high-net-worth clients.

It may be an opportunity to talk with your clients who don’t need RMDs to discuss potential financial planning strategies such as QCDs, QLACs, Roth Conversions, or even multi-generational tax strategies if their beneficiaries are also in high tax brackets.

2. Roth Accounts

There are numerous changes to Roth plans outlined in the SECURE 2.0 plan.

This may be a good time to discuss Roth contributions to your clients’ employer plans, or a Roth conversion for those that may have extra room in their tax brackets.

If you have a client who has experienced a decrease in taxable income, a Roth conversion may be a useful strategy to pay taxes now with no RMDs later.

You may have a small business owner that experienced a down income year (at least on paper).

They have room to create some taxable events.

These small business owners may benefit from a Roth conversion or event—for example, putting employer simplified employee pension, or SEP, money into a Roth account starting in 2024.

Does your client believe their tax rate is going to be higher or lower in retirement? Some individuals may answer this differently, but if you believe taxes will be higher in the future, then they may want to pay the taxes today and take tax-free income in the future.


A qualified longevity annuity contract, or QLAC, can provide longevity insurance and may help minimize RMDs for your clients.

They will be required to take distributions from the QLAC by age 85; however, this income stream can be a way to minimize longevity risk that can be a threat to the success of a financial plan.

A high-net-worth client who doesn’t need the income from their qualified plan is also likely to face longevity issues in their financial plan.

QLACs can be an excellent strategy to lower potential RMDs and provide some longevity insurance.

4. Charity