In the last days of 2022, President Joe Biden signed the SECURE 2.0 Act of 2022 into law, after it was approved by the U.S. Senate and the House of Representatives.
So, after the SECURE 2.0 Act of 2022 became a law, what does this all mean? And what provisions were made that can impact you?
Here is what plan advisors, administrators and sponsors need to know about the provisions that are already in effect. The first thing to understand is that SECURE 2.0 is a collection of provisions, intended to build upon the provisions passed in the SECURE act of 2019. Some of the new provisions will require automatic enrollment in some workplace 401(k) plans, increasing so-called “catchup contributions” for older workers and increasing access to retirement plans for parttime workers.
Another change is increasing the age for required minimum distributions (or RMDs).
There are also some provisions that are set to increase access for employees to emergency funds.
These changes are intended to update the U.S. retirement system and SECURE 2.0 is included in the $1.7 trillion spending bill for 2023.
Other changes include:
- Penalty free withdrawals from retirement plans for individual case of domestic abuse
- Withdrawal for Emergency Personal Expenses (up to $1,000 per year)
- Catchup contributions may be required to be Roth contributions based on participant wages
SECURE 2.0 also includes incentives for small businesses to set up savings plans for employees.
Want to learn more about the SECURE 2.0 Act of 2022? You can read more about it here.
Do you still have questions about retirement planning options, or how your small business can participate?
Follow us on LinkedIn and Facebook!
If you have other questions about retirement plan loans,email us or call 937.308.0758.
Recent Comments