January 3rd, 2023
On December 29, 2022, President Biden signed Secure Act 2.0 of 2022 (part of the Consolidated Appropriations Act of 2023) into law. This act has resulted in many changes impacting retirement savings, emergency access to retirement savings, catch-up contributions and required minimum distributions.
According to “Secure 2.0 Act Changes 401(k), IRA, Roth, Other Retirement Plan Rules” by Kelley R. Taylor updated January 3, 2023 on Kiplinger.com (https://www.kiplinger.com/retirement/bipartisan-retirement-savings-package-in-massive-budget-bill), “ SECURE 2.0 is expected to reshape retirement tax incentives for years to come since the retirement savings law makes numerous changes to existing retirement account rules.”
In addition to changing the required minimum distribution age from 72 to 73 effective January 1, 2023, there is also an advantage on the horizon starting in 2025 for workers between the ages of 60 and 63 who participate in a 401(k) plan to increase their catch up contribution to $10,000. If you are currently saving for retirement, ensure that you speak with your tax professional to ensure you take full advantage of the changes coming as a result of the Secure Act 2.0 of 2022.
Source: Taylor, K. (2023, January 3). “SECURE 2.0 Act Changes 401(k), IRA, Roth, Other Retirement Plan Rules“. Kiplinger. https://www.kiplinger.com/retirement/bipartisan-retirement-savings-package-in-massive-budget-bill