Secure Act 2.0

President Biden has signed the SECURE 2.0 Act, which will go into effect this year.  Here are some key take aways from the new law that could potentially impact our clients:

• The age requirement to start taking RMD’s moves to 73 in 2023, up from 72 the previous year.  The SECURE ACT also moves the RMD age to 75 beginning in 2033.  The penalty for not taking you RMD is reduced from 50% to 25% and in some cases 10%.  
• For tax yar 2023, 401k participants aged 50 and older can use the “catch up” provision to contribute $7,500 into their retirement accounts.  This amount will increase to $10,000 in 2025 for participants aged 60 to 63.  
• In 2024, student loan payments can be counted as retirement contributions on an employer match basis - Meaning, if employees are paying student loans, employers will be able to make contributions on retirement accounts on behalf of the employee.  
• Starting in 2022, employers who begin new retirement plans will now have to go the path of “opt out” instead of “opt in” for employees.  The contribution rate will be at least 3% of salary but no more than 10%.  

• Starting in 2027, low to middle income workers will be able eligible for a $2,000 per year federal contribution match into retirement plans.  

Some other notable retirement plan contribution limits that have changed in 2023:

• 401k plan contribution limits increase to $22,500, up from $20,500 in 2022.  
• IRA contribution limits increase to $6,500, up from $6,000 in 2022.  The catch-up contribution remains at $1,000 – those over 50 years old are eligible to put $7,500 into their IRA’s.  

Please give us a call at (518) 279-1044 if you have any questions regarding your accounts, the new SECURE Act or would like to update your contribution limits.

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