SECURE Act 2.0: IRA Changes to Know About

Home Blog SECURE Act 2.0: IRA Changes to Know About

Posted On: June 17, 2024 by Peoples Bank of Kankakee County in: Retirement

Below we will be diving into the recent changes to Individual Retirement Accounts (IRAs) that every consumer should know about. As the landscape of retirement planning continues to evolve, staying informed about updates to retirement accounts is essential for making sound financial decisions.

In this post, we'll explore the key changes to IRAs, how they may impact your retirement savings strategy, and what steps you can take to maximize the benefits of these updates.

Overview

SECURE 2.0 Act tells us the Required Minimum Distribution (RMD) age is 73.

Prior to 2020, the law required traditional (including SEP1 and SIMPLE2) IRA owners to take RMDs beginning in the year age 70 ½ was attained. The SECURE Act delayed this requirement until age 72.

This means that IRA owners are required to take the first RMD by April 1st of the year following the year in which the required age was attained, and by December 31 for each year after that.The RMD age will change to 75 after 2032.

Importantly, IRA owners subject to the younger RMD age requirements must continue taking RMDs each year.

SECURE 2.0 Act adds new exceptions from the 10 percent IRA early-distribution penalty tax for certain individuals.

For distributions made prior to age 59 ½, the 10 percent early-distribution penalty tax will not apply to an IRA distribution if the owner has a terminal illness, is a victim of domestic abuse, and for certain emergency expenses. Such distributions may be repaid any time during the 3-year period beginning on the day after the date on which the distribution was received.

With the SECURE 2.0 Act introducing shifts in the Required Minimum Distribution (RMD) age and providing exceptions from the early-distribution penalty tax, IRA owners must navigate these changes wisely. Whether you're planning for retirement or already enjoying your golden years, understanding how these updates impact your retirement savings strategy is essential. Remember, for personalized advice tailored to your individual circumstances, it's always best to consult with a qualified tax or legal professional. Keep investing in your financial knowledge, and may your retirement journey be filled with security and prosperity.

This information is not intended to provide recommendations, legal advice, or be a detailed explanation of the rules or how those rules may apply to your individual circumstances. For specific information, please consult your tax or legal professional.

An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway. We can cover your overdrafts in two different ways:

We have standard overdraft practices that are available after your account has been open for 30 days and as long as you maintain your account in good standing.
We also offer an overdraft protection plan, Overdraft Protection Sweep, a link to a savings account. It may be less expensive than our standard overdraft practices. To learn more, ask us about this plan.

This notice explains our standard overdraft practices.

What are the standard overdraft practices that come with my account?

After your account has been open for 30 days and as long as you maintain your account in good standing, we do authorize and pay overdrafts for the following types of transactions:

Checks and other transactions made using your checking account number
Automatic bill payments

We do not authorize and pay overdrafts for the following types of transactions unless you ask us to (see below):

ATM transactions
Everyday debit card transactions

We pay overdrafts at our discretion, which means we do not guarantee that we will always authorize and pay any type of transaction.

If we do not authorize and pay an overdraft, your transaction will be declined.

What fees will I be charged if Peoples Bank of Kankakee County pays my overdraft?

Under our standard overdraft practices:

We will charge you a fee of up to $30 each time we pay an overdraft.
The maximum daily overdraft fee per presentment or item paid using the Overdraft Reserve Program is $150.00 per day.
No per item handling fee will be charged on de minimis overdrafts. De minimis overdraft for this policy means transactions that overdraw your account by $30 or less.
There is an overdraft fee of $5 per day that will be charged beginning the 4th consecutive business day your account is overdrawn.

Nonsufficient funds (NSF) fees - if an item drafted by you (such as a check) or a transaction you set up (such as a preauthorized transfer) is presented for payment in an amount that is more than the amount of money in your account and we decide not to pay the item or transaction, you agree that we can charge you an NSF fee for returning the payment. Be aware that such an item or payment may be presented multiple times by the merchant or other payee until it is paid, and that we do not monitor or control the number of times a transaction is presented for payment. You agree that we may charge you an NSF fee each time a payment is presented if the amount of money in your account is not sufficient to cover the payment, regardless of the number of times the payment is presented.

PAYMENT ORDER OF ITEMS - The law permits us to pay items drawn on your account in any order (for purposes of this section "items" means checks, orders and electronic transactions). To assist you in handling your account with us, we are providing you with the following information regarding how we process those items. When processing checks and orders drawn on your account our policy is to pay lower numbered checks and orders in numerical sequence, but electronic transactions are paid first in the order received. The order in which items are paid is important if there is not enough money in your account to pay all of the items that are presented. There is no policy that is favorable in every instance. If the smallest items are paid first, you may have fewer NSF or overdraft fees, but the largest, and perhaps more important items (such as rent or mortgage payments) might not be paid. However, if the largest items are paid first, your most important items might be paid but it may increase the overdraft or NSF fees if funds are not available to pay all of the items. We think our policy attains a reasonable balance between minimizing additional costs to you and paying your more important items. We encourage you to make careful records and practice good account management. This will help you to avoid creating items without sufficient funds and incurring the resulting fees.

What if I want Peoples Bank of Kankakee County to authorize and pay overdrafts on my ATM and everyday debit card transactions?

If you also want us to authorize and pay overdrafts on ATM and everyday debit card transactions after your account has been open for 30 days, you may opt in.

You have an ongoing right to change this consent at any time. If your overdraft privilege has been revoked for any reason, the opt-in or opt-out selection may not apply. Please contact your nearest office for more information.

Alternate ways to Opt In/Out or make changes:

By Phone. Our Customer Care Representatives can be reached at 815-936-7600.
By Mail. Peoples Bank of Kankakee County, 333 E. Court Street, Kankakee, IL 60901
In Person. Please visit your local office and ask a representative to help you decide which plan is best for you.