The landscape of retirement savings is evolving, with changes on the horizon for IRAs and 401(k)s that may impact how you plan for your future. Staying informed and staying ahead of these changes is key to maximizing your savings potential and avoiding any penalties that may come your way.
One important change to be aware of is the SECURE 2.0 Act, which introduces several adjustments to retirement plans over the next few years. These changes will affect traditional IRAs, Roth IRAs, and 401(k)s, so it’s crucial to familiarize yourself with them to ensure you’re on track for a secure retirement.
Significant changes are coming to IRAs and 401(k)s in 2025. First, individuals aged 60 to 63 can make super-sized catch-up contributions to their 401(k) accounts, saving them even more for retirement. For the contribution limits for IRAs and 401(k), visit the IRS website HERE. Additionally, automatic enrollment features for new 401(k) plans will be established after December 29, 2022, encouraging increased individual retirement savings.
For those with SIMPLE IRAs, catch-up contributions for individuals aged 60 to 63 will change, providing more opportunities for older savers to boost their retirement funds. Furthermore, a new 10-year rule for inherited IRAs will take effect, requiring beneficiaries to withdraw all funds within the tenth calendar year following the original owner’s death.
It’s important to note that penalties for not taking required minimum distributions from inherited IRAs will be enforced starting in 2025, emphasizing the need for beneficiaries to stay compliant with IRS regulations to avoid financial consequences.
As these changes unfold, it’s crucial to consult with tax experts to navigate the evolving landscape of retirement savings effectively. Being proactive and informed about these changes can help you make the most of your IRAs and 401(k)s as you plan for a financially secure future. For some additional information about understanding your IRA, visit this previous POST.
