On December 29th, 2022, President Joe Biden signed the $1.7 trillion omnibus spending package into law. Included in the package was the Secure 2.0 Act, which enacted several changes to the federal retirement system. Among those changes are the following:
- Increasing the age to start taking RMDs to 73 in 2023 and 75 in 2033.
- Decreasing the penalty for failing to take an RMD from 50% of the RMD amount to 25%, and 10% if immediately corrected for IRAs.
- Beginning in 2025, the catch-up contribution for those 60 to 63 years of age will increase to $10,000 for 401(k), 403(b), IRA account holders, and government plans.
- Requires businesses that offer 401(k) and 403(b) plans to auto-enroll new employees and allows employers to make matching contributions to an employee’s retirement plan based on their student loan repayments.
- Starting in 2024, the RMD requirement will be exempt from ROTH accounts in employer retirement plans.
- Retirement plans will be accessible to more part-time employees.
