Why?

There have been many changes in the retirement planning landscape over the past year due to recent updates to the Secure Act, which was passed in 2019. Orion's financial planning system, Orion Planning, is making considerable updates to accommodate these changes for incorporation into your firm’s financial plans.

 

 

What?

• Changes to the RMD ages depend on the year of birth.

• Clients who are ages 60, 61, 62, or 63 at year-end will have the ability to make higher contributions to their employer plans.

 

 

How?

RMD Changes based on Year of Birth

Secure Act 2.0 Phases for RMD Beginning Ages

RMDs begin at ages 73 and 75 for certain clients:

 

Birth Year	Age at Which RMDs Begin
1950 or earlier	72 (70 1/2 for those who turned 70 1/2 prior to 2020)
1951 - 1959	73
1960  or later	75

 

In Orion Planning, you will automatically see these changes applied for clients based on their Date of Birth under Profile > Personal Information.

See Johnny Bench example below. Both the partner and primary are born after 1960, making their RMDs begin at 75.

 

 

Cash Flow Report

 

Advanced Report: RMD

 

 

Increased Catch-Up Contributions for Participants at Certain Ages

Effective for 2025 and in future years, Section 109 of SECURE Act 2.0 increases employer retirement plan (e.g., 401(k) and 403(b) plan) catch-up contribution limits for certain plan participants. More specifically, participants who are only ages 60, 61, 62, and 63 will have their plan catch-up contribution limit increased to the greater of $10,000, or 150% of the regular catch-up contribution amount (indexed for inflation) for such plans in 2024.

If the catch-up limit for 2024 is $7,500, 150% of this would be $11,250. If they max out their employee contribution to the plan, a 401k for instance, they will be able to contribute up to $34,250 in 2024 ($11,250 + $23,000), indexed for inflation in future years. This will appear in the first column of the cash flow report in Orion Planning.

 

 

Additional Resources

Examining the Highlights of the Secure Act 2.0

Guidance on Certain Provisions of Secure Act 2.0