One change increasing the required minimum distribution age from 72 to 73 goes into effect Jan. 1.
Others wont roll out for a few years.
Here are some of the highlights.
8 Changes That Make Managing Your Retirement Plan Easier
1.
Employees are more likely to save for retirement if they dont have to navigate the often confusing sign-up process.
Employees can then opt out of participation if they want.
Our team has compiled alist of creative waysyou can fatten your bank account this week.
This is a long list, so dont get overwhelmed.
Well keep it updated as offers changes or expire.
Tracking down old 401(k) accounts is tricky at best and a time-consuming nightmare at worst.
Secure 2.0 gives the U.S. Department of Labor authority to create a newlost and found database.
Workers will be able to search this database for old retirement accounts they may have forgotten about.
The database is set to roll out roughly two years from now.
To be clear, your employer wont help you pay off your student loans.
With the help of their employer, they can do both at the same time.
But theres a big problem with the current credit: Its nonrefundable.
So if you dont owe taxes which many low-to-middle income workers do not the credit doesnt help much.
Secure 2.0 changes that by making the credit refundable.
Income limits and phase-out restrictions will apply.
Raises the Age for Required Minimum Distributions
You cant keep your retirement savings in a tax-advantaged account forever.
Uncle Sam eventually wants his cut.
Starting Jan. 1, 2023, that age increases to 73.
In 2033, the RMD will increase to 75.
Secure 2.0 bumps those yearly retirement account contributions even higher for people ages 60 to 63.
After 2025, those catch-up contributions will be indexed for inflation.
Secure 2.0 allows employees to withdraw up to $1,000 per year for an emergency or financial hardship penalty-free.
Youll still owe taxes on the withdrawal too, unless youre withdrawing from a Roth account.
Secure 2.0 also waives the 10% penalty for people with a terminal illness and survivors of domestic abuse.
It can be a great way to save for a childs college expenses.
But funds withdrawn for non-educational expenses are typically subject to income tax and a 10% penalty.
The 529 account must also be open for at least 15 years before funds can be rolled over.
Others see the new rule as a tax break for the rich.
Rachel Christian is a Certified Educator in Personal Finance and a senior writer for The Penny Hoarder.
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