Sheltered For Mac Download: Understanding the SECURE 2.0 Act's Changes

The SECURE 2.0 Act of 2022 has brought about significant changes to retirement savings plans in the United States. One such change is Section 604, which allows employers to make certain nonelective contributions that can be designated as Roth contributions after December 29, 2022. This article will delve into these changes and explain how they affect employees' retirement savings.

Increased Limits on Annual Additions

For 2023, the limit on annual additions has increased from $61,000 to $66,000. This means that employers can contribute a higher amount towards their employees' retirement plans. Designated Roth nonelective contributions are now subject to this increased limit.

Elective Deferrals Limit Increased

The limit on elective deferrals has also seen an increase for 2023. The new limit is set at $22,500, up from $20,500 in previous years. This change allows employees to contribute a higher percentage of their income towards their retirement plans.

De Minimis Financial Incentives

Section 113 of the SECURE 2.0 Act permits employers to offer de minimis financial incentives to their employees who make elective deferrals. This provision aims to encourage employees to participate in retirement savings plans.

Income Limitations Adjusted

The adjusted gross income limitations for retirement savings contributions have also seen an increase. For married filing jointly filers, the new limit is set at $73,000, up from $68,000 previously. For head of household filers, the limit has increased to $54,750 from $51,000. Single, married filing separately, or qualifying surviving spouse with dependent child filers will see their income limitations rise to $36,500 from $34,000.

In conclusion, the SECURE 2.0 Act's changes have opened up new opportunities for employees to save for retirement and increase their contribution limits. Employers can take advantage of these changes by offering de minimis financial incentives and making designated Roth nonelective contributions. By understanding these changes, individuals can make informed decisions about their retirement savings and plan for a more secure financial future.

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