If you haven’t been as diligent with retirement savings (or if life got in the way and you couldn’t save much in your younger years) there is good news: Your employer might allow you to make catch-up contributions to your retirement plan if you are over age 50!

Currently, employers can allow catch-up contributions for employees who are 50 and older (the 2023 limit is $7,500) but they aren’t required to do so. And if your employer does allow it, you can make those catch-up contributions on a pretax or Roth basis.

And in 2024, the SECURE 2.0 act will include additional provisions for older plan participants who made more in wages than $145,000 in 2023. For those who meet that requirement, SECURE 2.0 mandates the catch-up contributions be made on a Roth basis – and then in 2025, the income limit will be adjusted for inflation.

There are some questions that remain in the wake of SECURE 2.0 that employers will need to seek answers for, in regards to catch-up contributions, and we expect those will eventually come.

SECURE 2.0 is aimed at providing laws that help more Americans get ready for retirement – no matter their age. Some other provisions are: Increasing the age for required minimum distributions (RMDs) and helping younger Americans save more while paying off student loans.

Employees need to keep track of the new law’s changes and employers also should be working to make sure they understand the changes – and make the necessary adjustments and communicate with employees.

There will likely be more to come on this by the end of the year, so stay tuned!

Do you still have questions about retirement planning options?

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If you have any other questions about retirement plan loans, email us or call 937.308.0758.