The Secure Act 2.0, enacted in the U.S., introduces significant changes to strengthen retirement savings. Citibank, through its financial education section, explains how this new framework improves conditions for those planning their retirement.
As stated by Citibank, there are several relevant updates that can have a direct impact on your finances. Knowing them will help you reach retirement with extra money in your pocket.
Secure Act 2.0 changes you should know according to Citibank
One of the most relevant changes according to Citibank is the increase in the mandatory age to start withdrawing funds from retirement plans. Starting in 2023, the age rises from 72 to 73 years old, and in 2033 it will increase to 75. This allows you to keep your money in the account longer, generating more returns before you start withdrawing it.
The Secure Act 2.0 also improves conditions for those who are between 60 and 63 years old. Starting in 2025, they will be able to make additional contributions to their retirement plans of up to $11,250 per year. This amount will be adjusted for inflation starting in 2026.
Another notable measure, as stated by Citibank, is the possibility of withdrawing up to $1,000 per year for emergencies, without paying a penalty. This option will be available starting in 2024 and offers greater flexibility for unexpected expenses. For those who have IRA accounts, increases in catch-up contributions by age will also apply, which further benefits long-term savings.
How Citibank helps you take advantage of these opportunities
One of the advantages highlighted by Citibank is the possibility of transferring leftover money from a 529 account (intended for education) to a Roth IRA account, without penalty or taxes. The maximum limit is $35,000 per person. This allows you to give a new use to those funds and continue building a solid retirement.
Additionally, starting in 2024, if you are paying a student loan, your employer can match the value of your payments and contribute it to your retirement account. In other words, even if you are paying off debts, you will also be saving for the future. Citibank guides you so that you understand these opportunities, review your current plan, and make decisions tailored to your age, income, and goals.