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Retirement Plan Changes

Retirement Funding

Retirement Plan Changes

On December 29, 2022 President Biden signed the SECURE 2.0 Act into law to encourage more workers to save for retirement. With over 90 retirement-related provisions, the legislation has a lot to it. With so many different topics covered, it can be difficult to determine which provisions are most applicable to you. Here are some of the most prevalent changes that may apply to your financial plan, and if not now, surely in the future. 

Immediate Changes


A required minimum distribution is an annual amount you must take out of your retirement account(s). This includes 401(k)s, 403(b)s, Traditional IRAs, Simple IRAs and SEP IRAs. For those born in 1951-1959 RMDs must start at age 73 and those born in 1960 or later start at age 75. This is done to ensure the government will receive taxes for these dollars that received a tax deduction at the time of contribution. There is a 25% penalty for missing your RMD. If you work with a financial advisor, they should help you determine when you need to take your RMD and the amount required.

Roth Contributions 

If your employer offers a SIMPLE IRA, you may be able to make Roth contributions. SEP IRAs are also permitted to make Roth contributions. 

Further Down the Road

Roth RMDs

In 2024, RMDs are no longer required for Roth accounts in employer plans, such as a Roth 401(k) or 403(b). Roth IRAs have never required RMDs.

Retirement Plan Catch-Up Contributions

Beginning in 2024, catch-up contributions for those age 50 and older must be made to a Roth account if your wages from the prior year exceeded $145,000. 

Effective 2025, those aged 60-63 can contribute the greater of an additional $10,000 or 150% of the standard catch-up limit in employer-sponsored retirement plans, which will be adjusted for inflation starting in 2026. Remember, the Roth requirement in the previous paragraph will apply if you earn more than $145,000 in the previous year. 

As you can see, there are a few major changes within Secure Act 2.0. For 2023, most provisions apply to those getting close to retirement with the RMD age changing and higher contribution limits. Over the next few years, we will see these other additions take effect. If you have any questions about Secure Act 2.0 and what planning opportunities may apply to you, don’t hesitate to reach out!

- Written by Tiffany Coffin

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