SECURE 2.0 - A Look at Possible Retirement Changes
At the end of March, the House passed retirement plan legislation—SECURE 2.0 (“Securing a Strong Retirement Act of 2022”)—with near unanimous bi-partisan support.
The Bill, which must be passed by the Senate to become law, includes, among other items, the following changes:
1. Increasing limits on annual catch-up contributions to $10,000 for those 401(k), 457(b) and 403(b) Participants age 62-64
2. Requiring catch-up contributions to be in the form of Roth (after tax) contributions;
3. Allowing participants to elect to have employer matching contributions made as Roth contributions;
4. Gradually raising the starting age for Required Minimum Distributions to 75 by 2032;
5. Allowing employer matching contributions on account of student loan payments for 457(b), 403(b), and 401(k) plans;
6. Increasing participant flexibility by eliminating the obsolete first day of the month deferral commencement rule for 457(b) plans;
7. Allowing 403(b) plans to participate in multiple employer plans;
8. Increasing the mandatory cashout limit from $5,000 to $7,500; and
9. Allowing small financial incentives, such as gift cards, to encourage employees to participate in a 401(k) or 403(b) plan.
At Kennerly Montgomery, we are here and ready to answer questions you may have about SECURE 2.0 and your business, your employees, and your retirement needs. Please do not hesitate to reach out to me or Ashley at 865-546-7311.