President Biden has signed a legislative package into law that includes the Securing a Strong Retirement Act of 2022 (or SECURE 2.0) that implements a number of changes to the tax rules for retirement plans.
SECURE 2.0 builds on the tax advantages for retirement savings included in the Setting Every Community Up for Retirement Enhancement Act of 2019. The most notable tax provisions included in SECURE 2.0 are:
- Mandatory 401(k) enrollment for employers with more than 10 workers
- Increasing the age when required minimum distributions (RMDs) must begin to 73 in 2023, and then to 75 in 2033
- Reducing the penalty for failing to take RMDs from 50% to 25% (effective 2023) and, in some cases, 10%
- Allowing older retirement savers to make larger catch-up contributions
- Increasing the number of options employers have for providing 401(k) matches
- Improving worker access to emergency withdrawals from their retirement accounts
- Giving part-time workers increased access to retirement accounts
- Changing the RMD rules for Roth 401(k) accounts (effective 2024)
If you wish to discuss this further with a member of our Team, please schedule a consultation using this link: https://calendly.com/karasseipeltax