SECURE Act 2.0 is an effort to build upon the successes of the SECURE Act passed in 2019, striving to give more employees access to retirement plans and other benefits.
Several provisions mandate automatic enrollment in specific workplace plans, allow for higher “catch-up” contributions from older workers and expand access to retirement plans for part-time employees.
What Is the SECURE Act 2.0?Automatic 401(k) and 403(b) EnrollmentStarting in 2025, employers will be mandated to automatically enroll their employees in 401(k) and 403(b) plans with a rate of at least 3% but at most 10%.
Increased RMDs AgeThe bill will raise the minimum required withdrawal age from 72 to 73 in 2023 and then again to 75 by 2033. Unfortunately, those already receiving Required Minimum Distributions (RMDs)will not be exempt from this law change.
Penalty Lowered for Missed RMDsWith SECURE Act 2.0, you won’t have to worry as much about accidentally missing your required minimum distribution (RMD).
RMD Rules for Roth 401(k)s ChangedAlthough Roth IRAs currently possess no RMDs for the original account holder, that is not necessarily true for Roth 401(k)s.