The age for starting required minimum distributions (RMDs) will increase from 72 to 73, beginning January 1, 2023. The age for beginning RMDs will further increase to 75 starting in 2033.
Starting January 1, 2025, individuals aged 60 through 63 will be able to make catch-up contributions up to $10,000 annually to a workplace plan, which is an increase from the current $7,500. The catch-up contribution limit for IRA accounts will also be indexed to inflation starting in 2024.
Employers will be able to provide employees with the option of receiving vested matching contributions to Roth accounts. Previously, matching contributions were made on a pre-tax basis. The legislation requires businesses adopting new plans to automatically enroll employees in the plan and offer automatic plan portability, allowing employees to move their retirement savings from one employer-sponsored plan to another seamlessly.
Starting in 2024, participants in 401(k) plans will be able to withdraw a penalty-free emergency fund from their accounts during the year of the emergency. Specific rules and circumstances will apply.
Starting in 2024, employers will be allowed to make matching contributions to an employee's retirement account based on the employee's student loan payments. This means employers can choose to match employees' retirement accounts based on the employees' payments to eligible student loans. This is an important provision that differs substantially from the typical matching contributions based on the deferrals of employee wages into the retirement plan.
Starting in 2022, 529 college savings plans can be used to pay down student loans, up to $10,000 for the student and another $10,000 for each of the student's siblings.