New deposit rules
You're referring to the new deposit rules in the United States!
As of January 1, 2024, the Secure Act 2.0, a bipartisan bill, went into effect, introducing new rules for retirement account deposits. Here's a summary of the key changes:
- Catch-up contributions: The annual catch-up contribution limit for 401(k), 403(b), and most 457 plans increased from $6,500 to $7,500 for individuals aged 50 and above.
- Required Minimum Distributions (RMDs): The bill delayed the RMDs for certain retirement accounts, such as IRAs and 401(k)s, until age 73. This change applies to individuals born between 1950 and 1959.
- Annuities: The bill allows annuity contracts to be used as qualified retirement plan distributions, making it easier for retirees to receive guaranteed income for life.
- Multiple Employer Plans (MEPs): The bill expanded the use of MEPs, allowing more employers to participate in a single plan, which can help small businesses and solo practitioners offer retirement benefits to their employees.
- Retirement Plan Start-Up Costs: The bill allows employers to deduct start-up costs for new retirement plans, making it more feasible for small businesses to establish a plan.
- Automatic Enrollment: The bill encourages automatic enrollment in retirement plans by allowing employers to automatically enroll employees in a plan, making it easier for employees to start saving for retirement.
These changes aim to promote retirement savings, increase access to retirement plans, and provide more flexibility for employers and employees.