Congress passed a new spending bill just before the end of the year which included a number of changes that impact retirement savings. This has been dubbed the “SECURE Act 2.0” since many of these changes build off of the original SECURE Act that was passed back in 2019.

For a summary of the major changes, you can take a look at this article.

But I wanted to highlight a few of the new provisions that could be particularly impactful to young families:

529 plan to Roth IRA Transfers

Beginning in 2024, you can transfer up to $35,000 (lifetime limit) from a 529 plan to the beneficiary’s Roth IRA – this can be a big help if you end up with too much money in a 529 plan after your kids finish college. You could even change the beneficiary to yourself and transfer the money to your own Roth IRA. But there are a few limitations:

• The 529 plan must have been open for at least 15 years.
• Any contributions to the 529 plan made in the last 5 years cannot be transferred.
• You cannot transfer more than the IRA contribution limit for the year ($6,500 for 2023), and the beneficiary must have earned income.

This certainly makes 529 plans even more attractive if you’re looking to start saving for college. Give this article a read to better understand all of your options.

Solo (Self-Employed) 401(k)’s

These retirement plans can now be created and funded up to your tax filing due date for the previous tax year (e.g., April 15, 2024 for the 2023 tax year). Previously, plans had to be set up prior to the end of the calendar year.

If you’re self-employed and weighing your options when it comes to retirement savings, check out this article to learn more.

Student Loan 401(k) Match

Starting in 2024, employers can offer a 401(k) matching contribution for payments made toward student loans. You’ll have to check with your employer to see if they are planning to add this feature to your plan.

If you have questions on how any of these changes may impact you – get in touch with us here!

Joe Calvetti is a CPA and the founder of Still River Financial Planning, a comprehensive, fee-only financial planning firm that specializes in working with young families and professionals. Click here to learn more about how we work with clients.

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Disclaimer: The information provided above is for educational purposes only and should not be considered financial, legal, or tax advice. You should consult with a professional for advice specific to your situation.