Tax breaks and Retirement Savings Rules Changes, That’s What.
The $1.7B budget bill that landed on Biden’s desk includes the Secure 2.0 Act of 2022 which will reshape retirement tax incentives in your favor for years to come.
Can’t afford to join your employer’s retirement savings matching program? Effective in 2024 your employer can make contributions to your retirement plan based on your student loan payments. Pay off student debt and save for retirement at the same time; finally.
Did you lose track of retirement benefits from a previous employer? The Secure 2.0 Act of 2022 enables the creation of a searchable database; a retirement savings “lost and found” that will be based at the Department of Labor.
Unable to maintain an emergency savings cushion? The Secure 2.0 Act of 2022 allows a single, annual $1000 emergency distribution from your retirement account; free from the 10% penalty for early distribution. Pay it back so you are eligible for an emergency distribution next year. If you are unable to pay it back you must wait three years for the next penalty-free $1000 emergency distribution.
Wondering about the 401K deduction on your first paycheck? Automatic enrollment increases employee participation. You may choose to opt out.
Are you over 50 and wish you had made more contributions to your retirement plan? The Secure 2.0 Act of 2022 increases the “catch-up contribution” limits beginning in 2025.
The Secure 2.0 Act of 2022 has made changes to existing rules to encourage employees to save for their retirement.