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I haven't paid close attention to it, but I got an email from my retirement plan about the SECURE 2.0 Act, which was signed into law on 29 Dec 22.
Among others, some notable provisions:
- Permits defined contribution plans to allow participants to elect to receive matching contributions on an after-tax Roth basis. (effective 2023)
- Increases the retirement plan catch-up contribution limits to the greater of $10,000 or 50% more than the regular catch-up amount for individuals ages 60 through 63. The increased amounts are indexed for inflation after 2025. (effective 2025)
- Requires catch-up contributions for individuals earning >$145k/yr (inflation adjusted) to be Roth contributions (effective 2024).
- Increases the required minimum distribution (RMD) age from age 72 to age 73 (effective 2023), then to age 75 (effective 2033).
- Eliminates pre-death Roth RMDs for employer-sponsored retirement plans. (effective 2024)
- Allows employers to offer emergency fund savings accounts connected to retirement plans, though capped at $2500.
- Makes it easier/penalty-free for people to take early withdrawals from retirements accounts for a variety of reasons (various effective dates)
- Permits 529 college savings account beneficiaries to roll over up to $35,000 over the course of their lifetime from any 529 account in their name to their Roth IRA, subject to the Roth IRA annual contribution limits. The 529 account must have been open for more than 15 years. (effective 2024)
There's obviously alot more in there... But some of these changes are pretty significant, and I've otherwise heard almost nothing about it. Soooo, just passing it on for everyone's awareness. Obviously employer plans will have to adjust & adopt many of these provisions, most of which are not mandatory... So they may take some time to become commonplace.
Among others, some notable provisions:
- Permits defined contribution plans to allow participants to elect to receive matching contributions on an after-tax Roth basis. (effective 2023)
- Increases the retirement plan catch-up contribution limits to the greater of $10,000 or 50% more than the regular catch-up amount for individuals ages 60 through 63. The increased amounts are indexed for inflation after 2025. (effective 2025)
- Requires catch-up contributions for individuals earning >$145k/yr (inflation adjusted) to be Roth contributions (effective 2024).
- Increases the required minimum distribution (RMD) age from age 72 to age 73 (effective 2023), then to age 75 (effective 2033).
- Eliminates pre-death Roth RMDs for employer-sponsored retirement plans. (effective 2024)
- Allows employers to offer emergency fund savings accounts connected to retirement plans, though capped at $2500.
- Makes it easier/penalty-free for people to take early withdrawals from retirements accounts for a variety of reasons (various effective dates)
- Permits 529 college savings account beneficiaries to roll over up to $35,000 over the course of their lifetime from any 529 account in their name to their Roth IRA, subject to the Roth IRA annual contribution limits. The 529 account must have been open for more than 15 years. (effective 2024)
There's obviously alot more in there... But some of these changes are pretty significant, and I've otherwise heard almost nothing about it. Soooo, just passing it on for everyone's awareness. Obviously employer plans will have to adjust & adopt many of these provisions, most of which are not mandatory... So they may take some time to become commonplace.