Over the past 5 years the landscape of self-directed IRAs (SDIRAs) and self-directed Solo 401(k) accounts has changed.\u00a0 As a result, we see several key developments, especially with the passage of the SECURE Act 2.0 in 2022. Here are the significant updates:<\/p>\n
1. Required Minimum Distribution (RMD) Age Increased: Effective in 2023, the age for RMDs from tax-deferred retirement accounts like Traditional, SEP, and SIMPLE IRAs increased from 72 to 73 years. In 2033, this will further increase to 75 years.<\/p>\n
2. RMD Penalty Reduction: The penalty for failing to take an RMD has been reduced from a 50% excise tax to a 25% excise tax of the required amount. If corrected timely, this further reduces to 10%.<\/p>\n
3. Changes in Prohibited Transactions: The SECURE 2.0 Act specifies that if an IRA owner engages in a prohibited transaction, only the IRA involved will be disqualified, not all IRAs of the individual.<\/p>\n
4. Higher Catch-Up Contributions (Effective 2025): There will be an increase in catch-up contributions for individuals aged 60-63, enhancing the capacity for later-stage retirement savings.<\/p>\n
5. Saver\u2019s Match (Effective 2027): A new initiative, the Saver\u2019s Match, will be introduced, which is particularly relevant for SIMPLE IRA account owners.<\/p>\n
6. Increased Flexibility in Contributions: SEP and SIMPLE IRAs, previously limited to pre-tax contributions, can now hold both pre-tax and post-tax funds. Additionally, catch-up contributions will be indexed with inflation starting in 2024.<\/p>\n
7. Automatic Enrollment in 401(k)s: Starting in 2025, new 401(k) plans must automatically enroll participants to contribute between 3% and 10%, with yearly increases up to 10%-15%, though participants can opt-out.<\/p>\n
8. Employer Matching for Student Loan Payments: Employers can now match student loan payments into 401(k)s, broadening the scope of employer contributions.<\/p>\n
9. Saver\u2019s Credit Transformations: The Saver\u2019s Credit will evolve into a matching system, depositing funds directly into individuals’ retirement accounts, effective after December 31, 2026.<\/p>\n
10. Retirement Savings Lost and Found: The Department of Labor will create a system to help individuals locate their pension or 401(k) benefits from past employers.<\/p>\n
1. Crypto IRAs: SDIRAs allow investing in a wide range of assets, including cryptocurrencies like Bitcoin, Ethereum, and others. These IRAs are increasingly popular for their potential to diversify portfolios and hedge against inflation.<\/p>\n
2. Types of Crypto SDIRAs: Investors can choose between Custodian Controlled SDIRAs, offering more streamlined processes and IRS compliance, and Checkbook Control SDIRAs, providing greater autonomy but requiring more involvement and responsibility for compliance.<\/p>\n
These updates reflect the evolving landscape of retirement planning and the incorporation of modern asset classes like cryptocurrencies into traditional investment strategies.\u00a0 For more information on self-directing your retirement, reach out to us at info@uDirectIRA.com.\u00a0\u00a0 Because uDirect IRA Services is not a fiduciary, we do not provide investment advice.\u00a0 We do provide a free 20-minute consultation to discuss your questions.<\/p>\n","protected":false},"excerpt":{"rendered":"
Over the past 5 years the landscape of self-directed IRAs (SDIRAs) and self-directed Solo 401(k) accounts has changed.\u00a0 As a result, we see several key developments, especially with the passage of the SECURE Act 2.0 in 2022. Here are the significant updates: Required Minimum Distributions 1. Required Minimum Distribution (RMD) Age Increased: Effective in 2023,…<\/p>\n","protected":false},"author":5,"featured_media":11865,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-11864","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"\n