How the new Consolidated Appropriations Act will change retirement

The Senate passed a $1.7 trillion government funding bill (the Consolidated Appropriations Act, 2023) on December 22, sending the package to the House for a vote. Following House approval, the President is expected to sign the measure before government funding expires. Note that the Senate cleared by voice vote a bill to extend the government funding deadline to December 30.

In addition to financing the federal government for its 2023 fiscal year, the bill contains the SECURE 2.0 Act (the Act), which includes over 100 retirement-related provisions intended to build on reforms passed in late 2019.

Key retirement provisions in the Act include:

• Expanding automatic enrollment in 401(k) and 403(b) retirement plans

• Increasing the age for beginning required minimum distributions

• A higher catch-up Limit to Apply at Age 60, 61, 62, and 63

• Elimination of Additional Tax on Corrective Distributions of Excess Contributions.

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