One of the changes made by the SECURE Act 2.0 is that, effective 1/1/2024, catch-up contributions to employer-sponsored plans must be Roth (rather than tax-deferred as they are now) for any employee whose wages for the preceding calendar year from the employer sponsoring the plan exceeded $145,000.*
And if the plan cannot satisfy that requirement, the Act says that the plan must not allow any employee to make catch-up contributions at all.
Many employers are reporting that they won’t be ready to administer such a change by the beginning of the year — which would mean they’d have to “turn off” the option for catch-up contributions for everybody. So they’re requesting a delay in the effective date for the change.
Other Recommended Reading
85% of C-Suite Execs Say Public Reporting of Workforce Well-Being Metrics Should Be Mandatory (new research from Deloitte)
Some Other Forms of Wealth from Ben Carlson
Do as I Say (Not as I Do) from Christine Benz
Have Older Investors Become Too Aggressive? from John Rekenthaler
4 Questions to Answer Before Creating Your Retirement Portfolio from Chris Mamula
Thanks for reading!
*I italicized “from the employer sponsoring the plan” because a question I’m seeing repeatedly is along the lines of: “What if I switch jobs? How will my new employer know whether my total income for the prior year exceeded $145,000?” Answer is: they don’t have to. It’s not your total income that counts here. It’s specifically your wages from the employer sponsoring the plan in question that must exceed $145,000 in order to trigger the Roth catch-up requirement.
What is the Best Age to Claim Social Security?
Read the answers to this question and several other Social Security questions in my latest book:
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