SECURE Act 2.0
Jason Stolz CLTC, CRPC
The SECURE Act 2.0 reshaped retirement planning with updates to RMD ages, new beneficiary timelines, Roth rules, and charitable options. If you own annuities or expect to inherit one, the changes affect when and how you take money—and what you’ll owe in taxes. This guide breaks down what’s new, what still applies from the original SECURE Act, and how to adapt your plan.
What SECURE 2.0 changed at a glance
- Later RMD start ages: The age to begin required minimum distributions increases in stages, giving more years of tax-deferred growth on qualified assets.
- 10-year rule continues for most heirs: Many non-spouse beneficiaries must empty inherited qualified accounts within 10 years—planning matters.
- Roth enhancements: Several provisions expand Roth use, encouraging tax-diversification across your retirement timeline.
- Charitable strategies: QCDs remain a powerful tool to satisfy parts of RMD strategy while reducing taxable income.
RMD timing: why the new ages matter
Later start ages for RMDs can be a win for savers—but only if you manage the trade-offs. Fewer forced withdrawals now may mean larger required withdrawals later. That can elevate Medicare brackets or push you into higher marginal rates.
Two practical moves to consider:
- Bracket management: Fill lower tax brackets in your 60s with targeted withdrawals while delaying bigger RMDs later. If you own annuities, coordinate with your annuity income benefits plan to keep income smooth.
- Roth balancing: Spreading income among pre-tax, Roth, and taxable accounts helps avoid bracket spikes in your 70s and 80s. Our primer on how annuities are taxed is a helpful refresher before you fine-tune withdrawals.
Beneficiaries: the 10-year window still rules
Under SECURE (and reaffirmed under 2.0), most non-spouse beneficiaries of qualified accounts have to distribute the entire balance by the end of year 10. Timing matters: bunched withdrawals could collide with peak-earning years, while spread-out withdrawals can help control marginal rates and IRMAA surcharges on Medicare.
If you’ve inherited a contract and aren’t sure how it’s taxed, compare the frameworks in our step-by-step guides to inherited qualified annuities timeline and inherited non-qualified annuities strategies.
Charitable giving: QCDs remain a sleeper advantage
Qualified Charitable Distributions (QCDs) let IRA owners make direct gifts to charities, potentially satisfying parts of RMD strategy without increasing adjusted gross income. QCDs can also help limit taxable income that would otherwise push you into higher Medicare brackets. For execution details, see our qualified charitable distributions guide.
Coordinating annuities with the new rules
Annuities can be paired with SECURE 2.0 planning to create predictable income while managing required withdrawals. Two common use cases:
- Income smoothing: A guaranteed payout can keep you from overshooting brackets when RMDs begin. Compare options using current income annuity rates.
- Beneficiary clarity: Align your annuity’s death-benefit provisions with the 10-year rule and any period-certain options so heirs have a clean path.
If you’re weighing the mechanics, this explainer on does annuitization satisfy RMDs will help you set expectations before you choose a payout method.
Case study: postponing RMDs without future tax pain
Scenario: Dana, 66, has $1.2M across IRAs and a fixed annuity. With RMDs not imminent, she’s tempted to wait. We map a plan to take strategic withdrawals in low brackets during her early retirement while setting a modest guaranteed payout from an income annuity. Result: lower projected RMDs in her 70s and steadier income that helps control Medicare bracket outcomes.
Lifetime Income Calculator (model “what-ifs”)
Practical checklist under SECURE 2.0
- Verify your RMD start age based on your birth year and account type.
- Map a 10-year inheritance plan for heirs on qualified assets; model income by year.
- Use Roth and taxable balances to keep bracket “spikes” in check as you age.
- Incorporate QCDs to manage AGI if philanthropy is a goal.
- Align annuity payouts with RMD coordination and beneficiary timelines.
Need a foundation first? Review our annuities 101 starting guide and then confirm details unique to your state and contracts.
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FAQs: SECURE Act 2.0
What’s the biggest change in SECURE 2.0?
Later RMD start ages and expanded Roth features. Together they reshape timing and tax-diversification for retirees.
Did the 10-year rule for beneficiaries go away?
No. Most non-spouse beneficiaries of qualified accounts still have to distribute the balance within 10 years.
How should I plan withdrawals before RMDs start?
Use bracket-filling withdrawals, Roth conversions elsewhere, and coordinated annuity income to smooth future taxes.
Do QCDs still help with RMD strategy?
Yes. QCDs can satisfy parts of your plan and lower AGI, which may also help manage Medicare brackets.
How do these rules affect annuity owners?
Coordinate annuity payouts with RMDs and the 10-year rule for heirs; choose income options that fit your timeline.
What if I inherit an annuity under SECURE 2.0?
First identify qualified vs. non-qualified. Then build a schedule: see our guides for inherited qualified annuity planning and inherited non-qualified annuity strategies.
Can annuitization satisfy RMDs?
Sometimes—depends on the product and how payouts are structured. Review the details here: annuitization and RMD coordination.
Will SECURE 2.0 lower my lifetime taxes?
It can—if you use the extra runway to plan withdrawals strategically instead of waiting for large forced RMDs later.
What’s a simple first step to comply and optimize?
Confirm your RMD start age, chart a 10-year beneficiary plan, and run an income model with our calculator before choosing a payout path.
Where can I learn more about annuity basics?
Start here: annuities 101 overview and key annuity benefits.
