SECURE 2.0 Act of 2022
The SECURE 2.0 Act of 2022 was passed by Congress in late 2022 as part of the Consolidated Appropriations Act of 2023 and was signed into law by President Biden on December 29, 2022. This legislation puts forth a series of rules impacting retirement savings and is designed to make it easier for businesses to offer retirement plans and for individuals to both save for retirement and have access to their retirement funds. Some of the key provisions of SECURE 2.0 are:
The required minimum distribution (RMD) age rises to 73 in 2023 and 75 in 2033.
RMD’s from Roth 401(k)s and Roth 403(b)s will no longer be required starting in 2024.
Penalties for failing to take RMD’s are reduced.
Catch-up are contributions are increased to $7,500 in 2023 for individuals aged 50 and older and are increased in 2025 to $10,000 for individuals age 60 through 63.
Provides individuals easier access to retirement funds for use in emergencies.
Increases the tax credit employers with 50 or fewer employees starting a new plan from 50% to 100% per year for the first 3 years capped at $5,000.
Permits employers to make additional contributions in 2024 to each plan participant
For 2024, increases the annual deferral limit to 110% of the 2024 SIMPLE IRA Plans
A more detailed description of the provisions of SECURE 2.0 can be found using the attached link.